Quebec wants court to block national regulator plan

* Quebec will challenge government in court over regulator

* Says national securities regulator encroaches on rights

* Says decentralized regulation more effective

OTTAWA, July 8 (Reuters) - The French-speaking province of Quebec will challenge the federal government in court over plans to create a national securities regulator, accusing the federal government of trampling on provincial powers.

Quebec Finance Minister Raymond Bachand said on Wednesday his government would refer Ottawa's decision to the Appeal Court of Quebec.

In a joint statement by the ministers of finance, justice and intergovernmental affairs, the Quebec government called the regulatory reform plan an "encroachment on Quebec's jurisdiction over property and civil rights".

"Quebec has always affirmed and exercised its jurisdiction over securities legislation and regulation within its territory," said Claude Bechard, minister responsible for intergovernmental affairs.

Justice Minister Kathleen Weil said: "The federal proposal threatens Quebec's legislative competence and its administrative bodies."

Despite opposition from Quebec as well as Alberta and Manitoba, federal Finance Minister Jim Flaherty is pushing ahead with plans to replace the patchwork system of 13 provincial and territorial regulators with a single securities watchdog for the entire country.

Last month, he created a "transition office" tasked with drafting a plan to make the change happen. Flaherty's plan is to set the national regulator in motion with willing provinces, including Ontario, even without participation of dissenters such as Quebec.

Quebec also argued on Wednesday that it has considerable expertise in the area of securities regulation, which would be lost, and said the financial crisis has shown that regulation is more effective when decentralized. (Reporting by Louise Egan; editing by Peter Galloway)