UPDATE 1-Sharp denies it plans 10G LCD plant in China

* Report says Sharp seeks to raise chances of China approval

* Sharp says still negotiating on existing China panel plan (Updates with Sharp denial)

TOKYO Nov 19 (Reuters) - Japan's Sharp Corp (6753.T) denied a newspaper report on Friday that it was planning to build a state-of-the art 10th generation liquid-crystal display (LCD) panel plant in China.

Taiwan's Chinese language Commercial Times said Sharp was upgrading an existing plan for a less advanced LCD panel plant, in the hope of improving its chances of gaining Chinese government approval for the proposal. Sharp would spend up to 36 billion yuan ($5.43 billion) on the plan, the paper said.

"There is no such plan," Sharp spokeswoman Miyuki Nakayama said. She added that negotiations were continuing on an existing proposal for an 8th generation plant.

Sharp's LCD plant in Sakai, western Japan, is the world's first to process so-called 10th-generation glass substrates, which are bigger than earlier generation substrates and help cut per-panel production costs.

A source told Reuters two weeks ago that China has decided to approve $6 billion worth of investment in flat-screen plants by South Korean rivals Samsung Electronics (005930.KS) and LG Display (034220.KS). [ID:nTOE6A4019]

That could leave Sharp trailing as major display makers in Asia rush to set up LCD factories in China, which could soon become the world's largest TV consumer.

Taiwan's AU Optronics (2409.TW) also plans to build a 7.5-generation LCD plant in China. ($1=6.636 Yuan) (Reporting by Isabel Reynolds)