UPDATE 2-Iberdrola to sell 10 pct of turbine maker Gamesa

* Iberdrola to sell 10 pct stake in wind turbine maker

* Analyst sees sudden decision as move to improve finances

* M. Stanley hired to sell to institutions, investors (Adds details)

MADRID, June 1 (Reuters) - Spanish utility Iberdrola (IBE.MC) said on Monday it was selling 10 percent of wind turbine maker Gamesa (GAM.MC), a stake worth about 408.3 million euros ($581.1 million), based on Monday's closing price.

Iberdrola said it had contracted with investment bank Morgan Stanley to find institutions and qualified investors to buy 24.3 million shares. It owns 23.95 percent of Gamesa.

A company spokesman said the sale was part of Iberdrola's strategic plan for 2008-2010 to sell 3 billion euros' worth of nonstrategic assets to fund its growth.

It would continue to use Gamesa as its main supplier of wind turbines, he added.

"It is a surprise, people weren't expecting this," said Catharina Saponar, a renewables analyst at Nomura Securities in London, who holds a "neutral" rating on the stock.

"This is probably a financing exercise by Iberdrola. They announced a non-core disposal programme, but is this non-core? Presumably what Iberdrola wants from its relationship with Gamesa it can also achieve at a lower level of holding."

Iberdrola said in April it planned to cut its 34.2 billion euro debt pile and was confident it would find buyers for more than 2.5 billion euros of assets this year.

On Monday, Iberdrola's shares closed up 1.49 percent at 6.12 euros while Gamesa's shares were up 6.54 at 16.78 euros -- recovering from a 7.4 percent fall on Friday.

As well as its stake in Gamesa, Iberdrola is also involved in Gamesa through its renewable energy company Iberdrola Renovables IBR.MC. The two renewables companies have agreed to develop and manage wind parks in Spain and the rest of Europe. ($1=.7026 Euro) (Reporting by Ben Harding, Clara Vilar and Sarah Morris; Editing by Maureen Bavdek)