France may struggle to raise cash in property sales

* France seeking to sell mansions, castles and barracks

* Needs to raise money and reduce state-owned holdings

PARIS, Aug 26 (Reuters) - The French government's drive to raise badly needed funds by selling a chateau, sumptuous villas and a host of other state-owned properties may not be going as well as expected.

The big property selloff was announced in June at the height of a debt market crisis that prompted many governments to redouble efforts to improve public finances damaged by the worst recession since World War Two.

On the block are a chateau south of the capital, a mansion near the Eiffel Tower in the heart of Paris, a 13th century manor house, a military barracks and a prison in Lyon.

But as tender deadlines loom for some of the properties, bids from would-be buyers have been few and far between, according to Le Parisien newspaper, citing unnamed finance ministry officials.

Officials at France Domaine, the section of the French finance ministry responsible for managing the sales, were not available to comment on the report.

Jan Andrykowsky, who handles international investors at real estate services company DTZ Holdings DTZ.L in Paris, said that while he was aware of some interest, relatively few of the properties were in prime locations.

The government's goal is to complete the property selloff by 2013 and raise nearly 1 billion euros ($1.27 billion).

Although that looks like a drop in the ocean next to the 100 billion euros of budget savings the country hopes to achieve over the next three years, every euro the government can raise by other means than spending cuts or tax hikes, counts. (Reporting by Bate Felix; editing by Noah Barkin)