UPDATE 2-G20 to work on global rebalancing timeline-US official

* US says G20 wants progress on framework for rebalancing

* Rebalancing timeline to be lengthy, IMF to play a role

* Forex not on agenda but no surprise if it comes up (Adds details, background)

By Glenn Somerville and David Lawder

WASHINGTON, Nov 3 (Reuters) - Finance chiefs from the Group of 20 will begin to develop a timeline for reforms to better balance the global economy at a weekend meeting in Scotland, but emphasis needs to stay trained on boosting growth, a senior U.S. Treasury Department official said on Tuesday.

While details of policies that individual countries may adopt are not expected to emerge from Friday and Saturday's session at the golf resort city of St. Andrews, finance ministers and central bankers from the group of rich and developing countries want to start discussing how move ahead with a workable plan.

G20 political leaders agreed in Pittsburgh in September to take measures to better balance demand across the global economy -- with more consumption in Asia and higher savings in the United States -- in order to ward off risks of a repeat of the last financial crisis.

Now the G20 finance chiefs have the task of beginning to spell out how to do it, by having countries lay out their economic policies and intentions, as well as indicate what data will be used to measure progress.

"The IMF (International Monetary Fund) will assist the process of pulling data together and evaluating it and a mutual assessment process will need to be developed and fleshed out," the U.S. official said.

PROGRESS BY JUNE

"We will want a timeline that leads to substantive and productive discussions when leaders next meet in June," the official added.

Any concrete move to adopt specific policies for rebalancing will likely be delayed well into next year.

U.S. officials are well aware that U.S. budget deficits are unsustainably high. But U.S. Treasury Secretary Timothy Geithner has recently indicated that next year's budget in February will lay out a process for narrowing those gaps down over time.

Foreign exchange policy is not a formal item for the G20, but the U.S. official said it would be no surprise if it comes up on the sidelines, something other countries' officials have also said.

Some European countries, as well as Japan and Canada, have expressed alarm at the way in which their currencies have been appreciating in relation to the dollar, putting pressure on their exporters.

Canadian Finance Minister Jim Flaherty said on Monday "the downward pressure on the dollar (and) the relative inflexibility of some of the Asian currencies" was likely to come up, if only amid discussion on the overall economic outlook.

The U.S. official noted that despite the fact the U.S.. economy registered solid growth in the third quarter after a year of downturn, economic conditions remain "uneven and fragile" and need to be nurtured.

While there may be discussion of "exit strategies" after the extraordinary effort many countries have undertaken to pour money into their economies, it is widely seen as vital not to pull fiscal and monetary stimulus too early.

KEEP STIMULUS AS NEEDED

"We must be sure not to withdraw macroeconomic stimulus prematurely before recovery is fully secured," the official said.

Geithner will lay out progress so far in seeking a regulatory overhaul of the financial sector, including a bid to end the "too-big-to-fail" syndrome by putting in place a regime for winding down big banks that threaten the stability of the financial system.

Also on the table is global climate change, specifically efforts to help poorer countries finance the equipment to help reduce emissions.

"This issue has important macroeconomic and fiscal ramifications and is thus an important issue for finance minister," the U.S. official said.

The weekend meeting starts with a Friday dinner at which the touchy issue of reforming international financial institutions like the IMF and World Bank to make them more relevant will be the topic.

The U.S. official said the fund's governance structure "must evolve to reflect the relative weights and changing dynamics of the world economy" -- a way of saying that countries like China need more voting power at the expense of old-guard European economies.

But that will generate little fire on the weekend, since the goal remains to complete a review of quotas, or voting shares, by January 2011. The G20 will reaffirm its intent to review the adequacy of resources for lenders like the World Bank by March 2010, the U.S. official said.