UPDATE 1-German state says Biblis B restart depends on refit

* German state Hesse only allows Biblis B restart with refit

* Federal Environment Minister demands refit after Kruemmel

(Adds details)

BERLIN, July 15 (Reuters) - The German state of Hesse said on Wednesday that it will only allow RWE's Biblis B nuclear reactor to be restarted when it has been refitted with sump filters, the state's environment ministry said in a statement.

The ministry said that it agreed with utility RWE (RWEG.DE) to restart the reactor only with the filters installed.

Earlier, German Environment Minister Sigmar Gabriel urged RWE to postpone the restart until it had been refitted after the failed restart of the Kruemmel reactor in early July.

Gabriel told a news conference in Berlin that RWE had not yet been able to demonstrate that the Biblis plant has been set up with the state-of-the-art filter equipment used in the event of a malfunction. Biblis B has been down since Jan. 23.

He had warned that the federal government could intervene if the state authorities did not act.

Gabriel said that after the failed restart at the Krummel reactor in northern Germany it was in RWE's own interests to do all it could to prevent any problems with the restart.

Vattenfall Europe's [VATN.UL] Kruemmel power station went off the grid earlier this month when a transformer short-circuited after running at half load ahead of the botched full reopening.

This came after another transformer malfunction caused the go-slow, soon after the plant had restarted on June 28 in the wake of a two-year outage caused by a safety-related incident in the summer of 2007.

Kruemmel was built in 1984 and was meant to close in 2018 under a nuclear exit deal agreed in 2001, under which all 17 German reactors will close by 2021 at the latest. (Reporting by Erik Kirschbaum, Editing by Peter Blackburn)