* Hundreds of thousands hold hands across the region
* Independence movement has gathered pace in recent years
* Economic woes have harmed relations with Madrid (Recasts after line is formed, adds fresh quotes)
By Julien Toyer
BARCELONA, Spain, Sept 11 (Reuters) - Hundreds of thousands of Catalans held hands in a 400-km (250-mile) human chain across their region on Wednesday to press the Spanish government to let them vote on breaking away and forming their own country.
Demonstrators in yellow T-shirts and draped in blue, red and yellow separatist banners raised their joined hands through cities and along rural roads, jumping and shouting in celebration when the chain was completed.
"We want a referendum to see whether there's majority support for independence. The problem is Spain won't listen. Our only hope ... is that Europe and the rest of the world put pressure on the Spanish government," said Ester Sarramona, a 39-year-old civil servant.
Sarramona and her husband and two children joined the chain in the heart of Barcelona, Catalonia's capital. Like many other Catalans, they said their region was treated unfairly over taxes and cultural issues such as the Catalan language.
A deep recession and cuts in public spending in Catalonia, a wealthy industrial region in the northeast that accounts for a fifth of Spain's economic output, have stirred discontent with the central government in Madrid.
Polls show backing for secession has risen steadily in Catalonia, with some registering support as high as 50 percent. An large majority of Catalans want the right to hold a vote on the issue, the polls show.
PYRENEES TO VALENCIA
The demonstration, on Catalan national day, comes as separatists try to revive their referendum drive. Spanish Prime Minister Mariano Rajoy and Catalan President Artur Mas have signalled they are open to talks to end a year-long standoff over greater tax powers for the region.
Organizers said they accomplished their goal of forming an unbroken line from the Pyrenees in the north to the border with Valencia in the south, and television footage showed huge segments of the completed chain.
The act was inspired by a similar 1989 demonstration that helped the Baltic republics of Estonia, Latvia and Lithuania win independence from the Soviet Union.
Growing separatism in the region of 7.5 million people has become a major headache for Rajoy, who is mired in a corruption scandal and trying to pull Spain out of recession while also pushing through unpopular spending cuts.
Catalan separatists are watching closely a planned September 2014 Scottish referendum on independence from the United Kingdom, hoping it will promote the idea of self-determination for regions within countries that belong to the European Union.
Although Catalans have nurtured a separate identity for centuries, an independence movement surged recently as Catalans became disillusioned with limitations on the autonomy they gained in the late 1970s after the Francisco Franco dictatorship, which had suppressed Catalan nationalism.
Traffic clogged highways as police cut some roads to allow the chain to form.
"If we don't get a referendum people will just get more frustrated," said Bernat Cabero, a 53-year-old sculptor who lives in France and traveled home to Catalonia to participate.
PUSHING THE PRIME MINISTER
Rajoy says a referendum would be unconstitutional and has pledged to block it in the courts.
Opponents of independence argue the region has never been an entirely separate state. The Medieval Principality of Catalonia came under the Crown of Aragon, though it was allowed to run its own affairs through an institution known as the Generalitat.
The human chain linked up on Wednesday at exactly 17:14, symbolizing the year 1714 when King Philip V abolished the Generalitat after the War of the Spanish Succession.
Catalan President Mas has threatened to call an early election and use it as a plebiscite on secession if Rajoy uses the courts to block a referendum. This is seen as a risky move as his political alliance has lost ground while a more leftist separatist party has won support in the past year.
Mas is in a delicate position because the Catalan budget hole is so big that the central government had to bail out the region last year.
"We are talking with the Spanish government but I have a lot of doubts over whether it will be fruitful," Mas told foreign journalists on Wednesday morning.
Rajoy also has limited room for manoeuvre as any offer to Catalonia of better fiscal treatment or more political autonomy could spur protests in other Spanish autonomous regions such as the Basque Country. (Writing by Fiona Ortiz; Editing by Andrew Roche)