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* Commission cannot force member states to apply recommendations
* Commission says expects to propose new safety law next year
By Barbara Lewis
BRUSSELS, Oct 2 (Reuters) - Europe's nuclear reactor fleet needs investment of 10 billion to 25 billion euros, a draft Commission report said, following a safety review designed to ensure there is never a repeat of the Fukushima nuclear disaster.
The report is expected to be finalised by Thursday and debated by EU ministers later this month.
After that, the Commission intends in 2013 to propose new laws, including on insurance and liability to "improve the situation of potential victims in the event of a nuclear accident", the draft seen by Reuters said.
Of the 134 EU nuclear reactors grouped across 68 sites, 111 have more than 100,000 inhabitants living within a circle of 30 kilometres.
Safety regimes vary greatly and the amount that needs to be spent to improve them is estimated at anywhere between 30 million euros and 200 million euros per reactor unit - or a total of 10-25 billion across the fleet.
The lesson of Fukushima was that two natural disasters could hit at the same time and knock out the electrical supply system of a plant completely, so it could not be cooled down.
The stress test findings include that four reactors, located in two different nations, have less than one hour available to restore safety functions if electrical power is lost.
By contrast, four countries operate additional safety systems fully independent from the normal safety measures and located in areas well-protected against external events.
A fifth nation is considering that option. The stress tests are a voluntary exercise to establish whether nuclear plants can withstand natural disasters, aircraft crashes and management failures, as well as whether adequate systems are in place to deal with power disruptions.
All 14 member states that operate nuclear plants took part, however, as did EU member Lithuania, which is decommissioning its nuclear units. From outside the 27-member bloc, Switzerland and Ukraine joined the test regime.
The nuclear stress tests were meant to have been completed around the middle of the year, but member states were given extra time to assess more reactors.
Non-governmental organisations are among those who have criticised the stress tests for not going far enough and having no power to force the shut-down of a nuclear plant.
The draft report says the stress tests are not a one-off exercise and will be followed up. Existing legislation also needs to be enforced, it said.
The deadline for transposing the existing nuclear safety directive into national law was July 2011. The Commission started infringement proceedings against 12 member states that missed that deadline.
To date, two member states have still not complied but the report did not specified which ones. The Commission does not comment on leaked drafts. On Monday, the EU energy spokeswoman said the recommendations were being finalised and would not be very detailed.
In France, where nuclear provides around 75 percent of the energy mix, the nuclear watchdog and operator EDF said they would not comment before seeing the official report. (Additional reporting by Francesco Guarascio in Brussels and Michel Rose and Marion Douet in Paris, editing by William Hardy)