CORRECTED-(OFFICIAL)-UPDATE 1-Dubai seeks govt dept surpluses

(Corrects after Dubai government clarifies earlier statement which it says was meant to refer to government departments only, not to state-related entities)

* Dubai law lets fiscal committee reinvest surplus

* Law tightens financial oversight of government departments

(Adds details, background)

DUBAI, Dec 17 (Reuters) - Dubai's ruler on Thursday issued a law ordering government departments to transfer their surplus revenues to the emirate's treasury, and to improve transparency and control of public spending.

Dubai received a surprise $10 billion bailout from neighbouring Abu Dhabi this week to help its flagship company, Dubai World [DBWLD.UL] meet its debt obligations and stave off a bond default by Dubai World unit Nakheel [NAKHD.UL].

The new law allows profits and revenue surpluses to be reinvested, with the approval of the Supreme Fiscal Committee, in consultation with Investment Corporation of Dubai, which oversees the emirate's investment portfolio.

Government departments must transfer all revenues to the treasury.

Dubai, famous for its man-made islands in the shape of palms and other lavish spending projects, rocked global markets on Nov. 25 with a request for a standstill agreement on $26 billion in debt linked to Dubai World and its two main property units, Nakheel and Limitless World.

The emirate, which suffered a public relations black eye when it announced the standstill just before an extended Islamic holiday break, has announced a slew of initiatives aimed at boosting transparency.

It said earlier this week it would implement immediately an insolvency law modelled on U.S. and British practices in the event Dubai World needs to seek protection from its creditors. Dubai's ruler also created a tribunal, headed by three international judges, to oversee any disputes between Dubai World and its creditors.

The new law announced on Thursday also aims to regulate government departments' public spending "and control government revenues (and) provide an accurate database for revenues and expenditures." Top Dubai officials -- the heads of the Supreme Fiscal Committee and ICD -- were due in New York on Thursday in an effort to rebuild confidence in the Gulf emirate's finances after a stop in London the day before. [ID:nLDE5BG0VH] (Reporting by Rania Oteify; writing by Amran Abocar; editing by Jason Benham and Karen Foster)