* Afghan election watchdog fears will be unable to function for April vote
* U.N. says cannot release funds for commission pending government steps
* Serious fraud dogged 2009 presidential poll
By Jessica Donati and Hamid Shalizi
KABUL, Feb 6 (Reuters) - Afghanistan's election watchdog may not be ready in time for a presidential vote in April because of funding and staffing problems, a setback that could undermine a ballot already threatened by a repeat of the widespread fraud seen in 2009.
Presidential candidates began two months of campaigning this week ahead of the crucial election, which Afghans and Western allies hope will help consolidate fragile stability as foreign troops prepare to leave after nearly 13 years of war.
But, with the campaign well underway, the Electoral Complaints Commission (ECC) says it has received only a fraction of its funding from foreign donors because the government has yet to approve the appointment of provicial officials.
Until this happens, the United Nations - which administers its budget - cannot release money pledged.
"Apart from two big generators and some furniture the U.N. bought for us, we haven't received anything," said an ECC official who spoke on condition of anonymity.
"We have yet to open our offices in the provinces," he said, adding that the ECC's total budget included $12 million from the U.N. and 100 million afghani ($1.8 million) from the government.
The U.N. says it has done everything possible to prepare the ECC for the elections. But delays passing legislation and appointing staff have caused it to fall severely behind schedule.
"It's going to be a challenge for them to stand up in time, but it's not for want of international support," said Nicholas Haysom, deputy head of the U.N. mission.
"Delays have arisen out of the need to have decisions taken by one or another Afghan institution before progress can be achieved."
President Hamid Karzai is constitutionally barred from running for a third term. Both Afghans and the international community fear the election could be once again marred by the electoral fraud observed in the 2009 presidential vote.
Diplomats agree that what ultimately matters is whether a country split along ethnic lines will accept the outcome as legitimate even if the winner is not from the biggest community.
A functioning electoral watchdog is key to making this happen. But the ECC said it feared it might fail. "If it continues like this, we will face huge problems and won't be able review all complaints," said ECC spokesman Nader Mohseni.
While Afghanistan has no majority group, ethnic Pashtuns are considered the largest community and ethnicity will play a big role in deciding the next president.
Pashtuns are seen to dominate much of the east and south, while more liberal Uzbek, Tajik and Hazara communities are clustered in the north.
The U.N.'s Haysom said it would require hard work and focus for the provicial offices to be ready in time for the vote - and success depended on Afghan authorities taking the necessary steps in order for donors to be able to release funds pledged.
"Some of those critical issues are not within the international community's powers or responsibility, for example the appointment of commissioners has to be done by the president," Haysom said.
Election monitors similarly complain they are behind schedule because foreign aid donations were being released in instalments, conditional on certain processes.
"It has definitely affected our activities because in last elections we received all the funding at once," said Free and Fair Election Foundation of Afghanistan head Jandad Spinghar. "This time it's only instalments... not helpful at all." (Writing by Jessica Donati Editing by Maria Golovnina; Editing by Ron Popeski)