UPDATE 2-Wrecked Italian liner will not be moved for months
* Bad weather delays search of capsized vessel, fuel removal
* Wreck may remain where it is until at least end of year
* 17 bodies now found, 15 remain missing
GIGLIO, Italy, Jan 29 (Reuters) - The wreck of the cruise ship Costa Concordia could remain where it lies near the Italian island of Giglio until the end of the year or longer before it can be broken up or salvaged, the official in charge of the recovery operation said on Sunday.
Divers searching for bodies in the hulk, which lies half submerged a few metres from the shore, suspended work on Sunday after heavy seas and strong winds caused the vessel to shift noticeably, authorities said.
Bad weather had already delayed plans to begin removing the 2,300 tonnes of diesel fuel in the ship's tanks, an operation expected to take from three weeks to a month once it gets under way, probably by the middle of next week.
Civil Protection agency chief Franco Gabrielli, who is in charge of the operation, said removing the massive wreck from its position outside the port could take up to a year.
"We already knew that this was a very long, drawn out case but I think it's important that everyone is very aware that it will have a very significant timeframe," he told reporters.
Salvaging or moving the ship cannot begin until the fuel and lubricating oil is removed and the risk of an environmental disaster is averted. Even after that, other preliminary work must be done before a company is awarded the salvage contract.
"Just for that, we'll need not less than two months. From that date, we'll move to the operational phase, which will last from 7-10 months," Gabrielli said.
The delay could have a dramatic effect on tourism on the island, a popular holiday spot in a marine reserve off the mainland coast of Tuscany.
"I really fear a drastic fall in arrivals next summer, also because of the problems the ferries have getting into port," said local hotel owner Paolo Fanciulli.
The mayor of Giglio, Sergio Ortelli said the island would seek government help of the delay in moving the ship proved significant and he expressed some annoyance at the forecast.
"It would have been better to wait before talking about the timeframe until there is a firm project in place," he said.
The disaster struck more than two weeks ago when the 114,500-tonne Costa Concordia hit a rock which gashed its hull after it sailed to within 150 metres of the shore to perform a display manoeuvre known as a "salute".
Its captain, Francesco Schettino, faces charges of multiple manslaughter and abandoning ship before the evacuation of more than 4,200 passengers and crew was complete.
"The captain is well, he's reflecting on what happened and he is profoundly upset," his lawyer Bruno Leporatti said after meeting his client, who is under house arrest near Naples.
Divers found a 17th victim on Saturday, the body of a woman identified as a member of the crew, leaving 15 people still missing after the disaster on Jan. 13.
The search was halted on Sunday after measuring instruments placed on board the 290 metre long ship showed about 3.5 centimetres of movement in six hours, compared with a normal movement of one or two millimetres.
Officials have said it is stable and faces little immediate risk of sliding from its resting place in about 20 metres of water into deeper waters.
But even the slight movements posed a risk to divers exploring the ship's dark interior, which is filled with floating debris, including furniture, bedding, curtains and the personal effects of passengers and crew.
An extended legal battle is now in prospect after lawyers in the United States and Italy launched class action and individual suits against the ship's owner Costa Cruises, a unit of Carnival Corp , the world's biggest cruise operator.
Schettino has said he accepts his share of responsibility for the accident but says he was in constant touch with Costa Cruises during evacuation operations which have been widely criticised as slow and uncoordinated.
"What hurts the most is that there would have been time to save everybody of the order to evacuate had been given more quickly and not an hour and a half after the impact," said Maria Cristina Meduri, a passenger who escaped from the wreck.
She returned with her husband to Giglio on Sunday to thank local people who helped with shelter and warm clothing in the aftermath. However, she was bitterly critical of Costa, which is offering 11,000 euros in compensation - and will reimburse the ticket and other travel costs - in return for an agreement to drop any legal action.
"No, we will not accept it, it's nothing at all," she said. "I left objects with inestimable sentimental value on the ship, like the diamond engagement ring my husband gave me. We're not going to accept this."