BRUSSELS, March 13 (Reuter) European Union diplomats began meeting on Monday to discuss whether to hit Canada with trade sanctions in the latest stage of an escalating fish war between the EU and Ottawa.

Diplomats have asked their executive, the European Commission, to prepare a list of possible sanctions for discussion.

But one Spanish source said the 15 nation EU's room for manoeuvre on sanctions could be limited by the fact that EU exports to Canada could end up being hardest hit in any subsequent trade war.

Officials met on Sunday for what one EU diplomat said was "essentially a stock taking exercise" just as the Estai, the Spanish fishing vessel at the centre of the row, was escorted into the Newfoundland port of St John's.

Diplomats leaving the Sunday meeting refused to discuss possible action Brussels could bring against Canada for its capture on Thursday of the Estai, which was fishing for Greenland halibut 28 miles outside Canada's 200 mile (320 km) limit.

In St John's, a hostile crowd jeered the captain of the trawler and pelted a delegation of European ambassadors with rubbish and eggs shortly after Canadian authorities docked the boat.

Spain responded to the Canadian action by dispatching a second warship to the disputed Grand Banks region of the North Atlantic, the Efe news agency said on Sunday.

The row centres on the sharing of dwindling stocks of halibut, also known as turbot, in the north Atlantic fishing areas.

EU Fisheries Commissioner Emma Bonino, who has described the Estai's seizure as an act of piracy, has ruled out talks as long as the trawler is in Canadian hands.

Bonino, on a visit to Africa, issued a statement on Sunday deploring the use of the Estai as a bargaining tool. "I cannot accept that (an EU) fishing vessel and its equipment be used as a means of pressure against the European Union," the statement said.