UPDATE 1-Toyota memo raises stakes for Washington hearings

* Document trumpets $100 mln-plus floor mat savings

* Comes ahead congressional hearings Tuesday, Wednesday

* Toyota: one document does not define safety focus

* U.S. Transport Dept says document "very telling"

* U.S. aware of acceleration complaints back in 2003 (Adds details from document, recalls, background)

By John Crawley and Kevin Krolicki

WASHINGTON, Feb 21 (Reuters) - A Toyota Motor Corp (7203.T) document raised new questions about whether it stalled on a U.S. regulatory response to red flags about its vehicle safety as the company prepares to defend itself at congressional hearings this week.

Toyota's President Akio Toyoda testifies before U.S. lawmakers this week in an effort to contain a safety crisis that threatens the reputation and continued success of the automaker in the market that made it a global powerhouse.

But a 2009 internal document turned over to lawmakers and made available on Sunday shows Toyota's Washington D.C. staff trumpeting savings of more than $100 million by convincing regulators to end a 2007 investigation of sudden acceleration complaints with a relatively cheap floormat recall.

The document seems certain to add to the high-stakes debate about whether Toyota missed or ignored complaints about sudden acceleration in its vehicles and whether U.S. safety regulators were tough enough.

In recent months, Toyota has recalled over 8.5 million vehicles globally for problems that include sticky accelerators, accelerators that can be pinned down by loose floormats and a braking glitch on its Prius hybrid.

Toyota's U.S. sales plummeted 16 percent in January. Toyota has estimated those recalls will cost it $2 billion in the fiscal year ending March.

Toyota on Sunday reiterated that it was conducting a top-to-bottom review of all its operations.

"Our first priority is the safety of our customers and to conclude otherwise on the basis of one internal presentation is wrong," the company said.

But the U.S. Department of Transportation said the document highlighted Toyota's slow response to the safety problems.

"Unfortunately, this document is very telling," said department spokeswoman Olivia Alair in an emailed statement.

Toyota has launched a publicity campaign to convince current and prospective customers that the company is addressing the problems.

TOYODA APPEARANCE KEY

Toyoda, who is set to testify Wednesday after initially ruling out such an appearance, has acknowledged that the automaker founded by his grandfather let its standards slip during fast growth over the past decade.

Analysts said Toyoda's appearance in Washington will be a defining moment in whether and how quickly it can move beyond its safety crisis.

"Congress is doing him a favor. He can be apologetic and be contrite and take responsibility and acknowledge that there have been some stress points in growth of the company," said Jeffrey Sonnenfeld, a Yale School of Management senior associate dean and an expert on corporate leadership.

Toyota is mustering political support as well. More than 100 Toyota dealers, who are influential with Congress because of their impact on local economies, are gathering in Washington starting Monday.

The line of questioning that Toyoda faces will focus in part on how the automaker and officials handled a growing number of petitions to investigate whether there was a glitch with the electronic throttles in Lexus and Toyota vehicles.

Before an August 2009 crash that killed an off-duty California Highway Patrol officer and three others, Toyota had limited its action on sudden acceleration complaints to a recall of 55,000 floormats on the Camry and Lexus ES350.

But the the National Highway Traffic Safety Administration also faces criticism for having done little to force Toyota to come to terms with a growing record of consumer complaints.

NHTSA opened seven investigations into sudden acceleration in Toyota and Lexus vehicles between 2003 and the start of 2009 but closed five of them after concluding there was no evidence for any action.

Two probes ended with floormat recalls, a far cheaper fix than the more sweeping changes to accelerator pedals that Toyota announced late last year.

The July 2009 document, appears to be a briefing for Toyota's North American chief Yoshi Inaba prepared by the automaker's Washington staff, and cites sudden acceleration as a "key" safety issue and warns that U.S. regulators were taking a tougher line on forced recalls.

It goes on to credit Toyota's Washington safety group with having "negotiated" a floormat recall on the Camry and Lexus ES350 in 2007, a step credited with saving over $100 million and avoiding a finding of a defect by the NHTSA.

Documents subpoenaed by lawmakers and obtained by Reuters indicate insurance company State Farm reported to NHTSA in early 2004 about seven incidents of sudden acceleration involving Toyota Camry and Lexus models.

Transportation Secretary Ray LaHood, who will testify on Tuesday, said the agency was looking into related complaints in December of 2003.

James Lentz, president of Toyota Motor Sales USA, appears Tuesday before the House Energy and Commerce Committee along with the head of the National Highway Traffic Safety Administration, David Strickland.

Toyoda's much-anticipated appearance is scheduled for Wednesday before the House Oversight and Government Reform Committee, along with LaHood, Strickland and Inaba.

Former NHTSA administrator and consumer advocate Joan Claybrook is also among witnesses listed for Wednesday's hearing.

Regulators believe five deaths are associated with floor mats and are reviewing up to 29 other fatality reports to see if they are related to unintended acceleration.

In Tokyo, shares of Toyota gained 2.7 percent to 3,390 yen. The stock has lost 19 percent over the past month but has steadied over the past 10 trading sessions. (Reporting by John Crawley and Kevin Krolicki; Additional reporting by David Bailey and SoYoung Kim in Detroit; Editing by Tim Dobbyn, Bernard Orr)