UPDATE 1-Merkel wants talks with 20 top hedge funds-report

(Adds detail, background)

BERLIN, March 27 (Reuters) - German Chancellor Angela Merkel wants regular round table discussions between the world's 20 biggest hedge funds and Group of Eight regulatory authorities, German magazine Capital reported on Tuesday.

"She has proposed this plan in the framework of Germany's G8 presidency and hopes to get the agreement for it at the global economic summit," Capital said, adding that Merkel wants central banks and supervisory bodies to take part in the talks.

Leaders from the Group of Eight (G8) powers meet at a summit in Heiligendamm in Germany in June, at which they are due to tackle economic and other issues. Germany wants to promote hedge fund transparency during its G8 presidency this year.

"The round table should meet regularly and serve the confidential exchange of information, to thwart crises in global financial markets," Capital said.

Hedge funds have become a powerful market force, originally catering to the ultra-rich and institutions, but increasingly drawing clientele from the less well-heeled.

Their assets have doubled in the United States to more than $1.3 trillion over the last five years.

G7 finance ministers last month commissioned a report on the hedge fund industry by the so-called Financial Stability Forum, a panel of top-level officials set up to monitor issues of global market solidity.