By Peter Blackburn

BRUSSELS, Sept 6 (Reuter) - The European Union, concerned

about an economic squeeze on Spanish and Portuguese fishermen,

said on Wednesday it was ready to resume negotiations on a new

fisheries accord with Morocco.

The European Commission, which negotiates for the 15-nation

bloc, estimates that around 40,000 EU fishing industry jobs have

been put at risk after a previous four-year fisheries accord was

scrapped prematurely five months ago.

A sixth round of talks collapsed in acrimony early last week

over the size of fishing quota cuts demanded by Morocco.

"The Commission reaffirms its readiness to conclude

negotiations as soon as possible," the Commission said in a

statement. No date has been set for renewed talks.

The Commission said Morocco must show flexibility and a

willingness to strike a deal.

Rabat has not responded to trade concessions offered by the

EU in July on imports of Moroccan tinned sardines and citrus

fruit, a Commission official said.

The Commission was still studying ways of compensating EU

fishing industry workers affected by the closure of the Moroccan

fishery, a Commission spokesman said. Options include aid from

EU structural or fisheries guidance funds.

The Commission's statement signalled its desire to take a

broader view of EU-Morocco relations despite a call by Fisheries

Commissioner Emma Bonino last week that the EU should review its

relations with Rabat.

The EU was exasperated after Morocco, arguing that some fish

stocks faced extinction, rejected its final offer of a 25

percent cut in octopus and squid fish quotas over three years.

Rabat had demanded cuts of up to 65 percent.

But after discussing reports from the EU's Mediterranean

Affairs commissioner Manuel Marin and Fisheries Commissioner

Emma Bonino, the EU's 20 Commissioners decided that the fish

dispute should not hinder closer relations.

"...This dossier will not become a stumbling block to the

common objective...," the Commission said.

The Commission is in the process of negotiating a major

trade and cooperation deal with Morocco as the EU tries to forge

a free trade area in the Mediterranean.

Morocco said after last week's breakdown in talks that it

did not want a total rupture with its biggest export market but

it refused to have a solution dictated to it under threats.