By Charlie Dunmore and Julien Toyer

BRUSSELS, Sept 20 (Reuters) - Europe's health and consumerchief John Dalli has pledged to continue approving geneticallymodified (GM) crops while EU states debate a proposal to letthem decide whether to grow or ban the controversial technology.

"The process will go on, the process is going on. We are notgoing to wait," Dalli said in an interview with Reuters.

The proposals announced by the European Commission in Julywould allow France and others to keep their existing "safeguard"bans on growing GM crops, while countries such as Spain andPortugal would be free to press on with commercial GM planting.

European Union farm ministers will discuss the plans onSept. 27, but France, Germany and Spain have already said theproposals would undermine the 27-nation bloc's common policy onGM crops -- an argument Dalli said he struggled to understand.

"We are putting into effect the means through which, in amuch easier and more effective way, France can achieve what ittried to with its safeguard measures, so this is what I cannotsometimes comprehend," he said.

The Maltese commissioner said he could accept some changesto the proposals if that would win the majority support of EUgovernments and lawmakers, needed for the plans to become law.

But he ruled out a full review of the EU's legislation on GMcrops, saying he would rather stick with the current system thathas seen just two GM crops approved for EU cultivation in 12years if an agreement proves elusive.

In the meantime, the Commission will continue to use itspower to unilaterally authorise crops for cultivation and importwhenever governments fail to reach a decision, he said.

The bloc's executive will submit a long-delayed decision torenew the EU authorisation for Monsanto's 810 maize -- Europe'smost widely grown GM crop -- to member states by the end of theyear, he added.

NO PRO-GM AGENDA

Dalli's cultivation proposals followed his decision inFebruary to approve the GM "Amflora" potato developed byGermany's BASF.

That led environmentalists to accuse him of pursuing apro-GM agenda set by Commission President Jose Manuel Barroso,but the former Maltese finance minister said the decisions werepart of a wider strategy for Europe.

"GMOs or non-GMOs don't excite me all that much -- it's aquestion of innovation. If Europe is going to say 'no' toanything that is new, then we are condemned to backwaters," hesaid.

But Dalli's mantra of "responsible innovation" was at oddswith BASF's recent contamination of a field of its Amflorapotatoes in Sweden with an unapproved GM potato variety known as"Amadea".

He said the company's error -- which the Commission isinvestigating -- had upset him, and that similar incidents wouldnot be tolerated in future.

"I am pushing to make sure that we also monitor the controlsof the various companies operating in this area, in terms of howable they are to manage their production flows," he said.

NEW GM FEED IMPORT RULES

Dalli confirmed that in the coming weeks the Commissionwould propose a "technical solution" to the EU's zero tolerancepolicy on traces of unapproved GMOs in animal feed imports tothe bloc.

Soy imports from the United States came to a virtualstandstill in August 2009 after traces of unapproved GMOs werefound in shipments, sparking supply concerns for EU livestockfarmers dependent on imported soy protein.

The proposal will harmonise tests carried out by customsauthorities, and is expected to introduce a 0.3 percent marginof error for any unapproved GMOs found in shipments, provided anEU approval for the variety is already pending.

"For food, the zero tolerance rule will remain in place asfar as raw materials for food production go," Dalli stressed.

As the change would only require rubber-stamping by EUgovernments and lawmakers it could enter force within months.

By contrast, discussions on the GM crop cultivationproposals could drag on for up to two years, assuming a way isfound to overcome government opposition to the plans. (Editing by William Hardy)