UPDATE 1-EU appeals against ruling in WTO Airbus case

* EU appeal had been widely expected

* Further delays resolution of Airbus-Boeing disputes

* Airbus, Boeing vying for U.S. military tanker order (updates with confirmation of appeal, details, links)

By Jonathan Lynn

GENEVA, July 21 (Reuters) - The European Union appealed on Wednesday against a World Trade Organization ruling condemning its subsidies for Airbus (EAD.PA), prolonging a dispute with the United States for at least several more months.

A WTO spokeswoman confirmed Brussels filed the appeal shortly before a special session of the WTO's dispute settlement body.

The meeting, which had been due to begin at 10 a.m. (0800 GMT) but was cancelled because of the appeal, had been called by the United States to adopt last month's ruling by a panel of experts in the six-year-old case.

This would have required the EU to end prohibited export subsidies by Britain, Germany and Spain for Airbus's A380 airliner within 90 days, and withdraw other subsidies found illegal by the WTO or reverse their adverse effects.

"This dispute is too important to allow the legal misinterpretations of the panel to go unchallenged," Trade Commissioner Karel De Gucht said in a statement.

The EU argues that the aid that the WTO panel found to be prohibited export subsidies was not dependent on foreign sales, and that the panel's judgment on other subsidies was faulty.

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For a factbox on the appeal, click on [ID:nLDE66J1WB]

For more stories on the dispute, click on [ID:nLDE65O1RU]

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The appeal, which had been widely expected, followed a decision by another WTO panel examining the EU's countersuit against U.S. aid for Airbus rival Boeing (BA.N) to postpone an initial confidential ruling until mid-September from July 16.

Louis Gallois, chief executive of Airbus parent EADS, has said that the delay, announced as both aerospace companies battle for a $50 billion contract from the U.S. Pentagon for tankers, was unfair. [ID:nN18130960]

The Europeans had hoped that likely criticism of the Boeing subsidies in that case would have undermined the U.S. company's allegations that the EADS offer, based on the Airbus A330 plane, was possible only because of the EU subsidies.

WTO appellate judges must rule within 60 days under an accelerated timetable for prohibited subsidies, but in a complex case like this they could well take longer.

After that, if the United States believes the EU is not complying with the ruling within a mutually agreed period, it can launch a further compliance case. Meanwhile, the rulings in the dispute over Boeing aid will be issued.

As a result many trade lawyers believe the dispute -- over dominance in a market that the companies believe will be worth $3 trillion over 20 years -- will ultimately be settled through negotiations between the two sides, as Airbus and the EU Commission have called for.