* Zuma told to repay unnecessary costs
* Findings damage president and ANC ahead of May elections
* Security upgrade included swimming pool, chicken coop (Adds Zuma, ANC reaction, taxi driver quote, background)
By Ed Cropley
PRETORIA, March 19 (Reuters) - President Jacob Zuma benefitted "unduly" from a $23 million state-funded security upgrade to his home that included a cattle enclosure and amphitheatre, South Africa's graft watchdog said on Wednesday in a damning report six weeks before an election.
Public Protector Thuli Madonsela accused Zuma of conduct "inconsistent with his office" and said he should pay for some of the unnecessary renovations, which also included a chicken run and a swimming pool justified as fire-fighting equipment.
The findings are another blow to the scandal-plagued Zuma and may harm the ruling African National Congress (ANC) in the May 7 polls, although the former liberation movement, which has ruled since the end of apartheid in 1994, is still expected to win.
The Presidency said Zuma had been "consistently concerned about the allegations of impropriety" that have swirled around the upgrade. He would study the report and give his response "in due course", the statement added.
Madonsela's 444-page summary of her two-year probe into the renovations at the rural Nkandla homestead in KwaZulu-Natal province painted a picture of systemic official incompetence and flouted tender procedures that Zuma never questioned.
"The President tacitly accepted the implementation of all measures at his residence and has unduly benefitted from the enormous capital investment in the non-security installations at his private residence," Madonsela said.
The soft-spoken advocate, who has become famous for her exhaustive scrutiny of official irregularities, described the cost overruns as "exponential" and said ministers had handled the project in an "appalling manner".
When the Nkandla scandal first broke in late 2009, the cost was estimated at 65 million rand ($6.1 million). Despite intense public scrutiny since then, the bill ballooned to 246 million rand as the project spiralled out of control.
The total amounts to eight times the money spent securing the home of anti-apartheid leader Nelson Mandela, who died in December aged 95, and more than 1,000 times that spent on F.W. de Klerk, South Africa's last white president.
"ANC, BE CAREFUL"
Even though Madonsela's findings are in line with leaked excerpts to newspapers late last year, the ANC looks set to take a hit from voters angry at perceived corruption under Zuma and South Africa's shoddy public services.
In the last three months, townships around Johannesburg and Pretoria have been rocked by riots daily, mainly by young blacks mired in poverty and unemployment that has changed little in the two decades since white-minority rule.
Despite this social pressure, the report said funds earmarked for inner cities had been diverted to Nkandla.
"This stealing honestly makes me sad," said 29-year-old George Moloi, a taxi driver from Johannesburg's Soweto township.
"I love the ANC. I would die for the ANC, but they need to be careful because people are sick of empty promises and lies. The ANC will win the election, but I might vote for the opposition to send them a message."
The ANC, which has staunchly supported Zuma during previous corruption and personal imbroglios, cancelled a scheduled news conference, saying it needed more time to study Madonsela's findings. It will give its response at 0800 GMT on Thursday.
The report also criticised the placing of a clinic and police facilities inside the gated compound, saying they could have been moved outside for the benefit of the public in what is one of the poorest regions of Africa's wealthiest country.
"This is negative for the ANC," said Nic Borain, an independent political analyst.
"They will lose votes as a result of this."
Underscoring the challenges facing the ANC in an economy struggling to recover from a 2009 recession, thousands of members of the metalworkers union, South Africa's largest, sang anti-ANC songs as they marched through the streets of Johannesburg on Wednesday demanding greater workers' rights.
"SECURE IN COMFORT"
The report - entitled "Secure in Comfort" - added that Zuma had failed to question the scale or opulence of the construction work, which would have raised the eyebrows of a "reasonable person".
The government went to court last year to try to prevent Madonsela releasing her findings on the grounds they might jeopardise Zuma's security, but dropped the challenge after she said there was no threat.
Zuma, a polygamous Zulu traditionalist with no formal education, has been beset by scandal throughout a political career that included a decade alongside Mandela on Robben Island, the apartheid government's penal camp off Cape Town.
He was charged but acquitted of rape in 2006, and only became president in 2009 after corruption charges against him were dropped on a technicality days before the polls. While in office he fathered a child with the daughter of a close friend.
The extent of his unpopularity in urban areas was highlighted by the boos that greeted him at a memorial to Mandela at Johannesburg's Soccer City stadium in December, although he still enjoys strong support in the countryside. ($1 = 10.7320 South African Rand) (Additional reporting by Stella Mapenzauswa, Joe Brock and Zandi Shabalala; Editing by David Dolan, Pascal Fletcher and Andrew Roche)