UPDATE 1-Dubai official: Understands markets, creditors' woes

DUBAI Nov 26 (Reuters) - A top Dubai financial official said on Thursday he understood concerns in the markets and among creditors after the emirate's debt standstill request, but said "decisive action" was needed, according to an official statement.

Dubai struggled on Thursday to ease fears of debt default after its move to delay repayments at two flagship firms shook confidence in the Middle East as a center for investment and a source of capital.

Dubai's debt problems, a hangover from a property boom that produced the world's tallest building, have shaken trust among Western investors who turned to the oil-exporting Gulf region for help during the global financial crisis.

"We understand the concerns of the markets and the creditors, in particular. However we have had to intervene because of the need to take decisive action to address (Dubai World's) particular debt burden," Sheikh Ahmed bin Saeed al-Maktoum, chairman of Dubai's Supreme Fiscal Committee, said in the statement.

"Our intervention in Dubai World was carefully planned and reflects its specific financial position. The government is spearheading the restructuring of this commercial operation in the full knowledge of how the markets would react."

The emirate said on Wednesday it would ask creditors of Dubai World, the conglomerate behind its rapid expansion, and Nakheel [NAKHD.UL], builder of its palm-shaped islands, to approve a standstill on billions of dollars of debt as a first step toward restructuring. [ID:nGEE5AO2L1]

On Thursday, Dubai tried to revive confidence by saying its profitable DP World DPW.DI, which runs 49 ports around the world, would not be involved in the restructuring.

"Like most global cities, Dubai has experienced its share of economic and social challenges in this global downturn. No market is immune from economic issues," Sheikh Ahmed said.

"This is a sensible business decision. We want to ensure resources are deployed in the full knowledge that they are used to enhance the businesses of the Dubai World Group, build on the restructuring that has already been taking place, and ensure long-term commercial success." (Reporting by Firouz Sedarat; Editing by Jan Paschal) ((dubai.newsroom@thomsonreuters.com; +971 4 391 8301 ))