UPDATE 3-Clear Channel says wins ruling on $20 bln buyout

(Adds extra information about bank removal case)

NEW YORK, March 27 (Reuters) - Clear Channel Communications Inc (CCU.N) on Thursday said it won a temporary order from a Texas judge that prevents banks from reneging on their commitments to fund the $20 billion buyout of the radio operator.

The decision does not guarantee the closely watched buyout will go through but does prevent it from falling apart for now, analysts said. Clear Channel shares rose 10 percent to $29.60 but are still significantly below the $39.20 that private equity firms Bain Capital Partners LLC and Thomas H Lee Partners LP agreed to pay.

Six banks led by Citigroup Inc (C.N) were to provide more than $22 billion of financing, and earn more than $400 million in fees, for the buyout.

The private equity firms filed lawsuits in New York and Texas on Wednesday, accusing the banks of backing out of their commitments after capital markets deteriorated. Clear Channel joined in the Texas lawsuit.

The banks on Thursday filed to move the Texas case from Bexar County court to a federal court in the state, a copy of the filing, in the Western District of Texas, shows.

The filing claims that Clear Channel's buyers are prohibited from suing the banks in any state other than New York relating to the deal.

It was unclear from the filing whether the banks intended to move the case to a New York federal court after removal to Texas federal court. Lawyers from Davis Polk, who are representing the banks, were not immediately available for comment.

One lawyer not representing either side who declined to be named said in the process of removal of a case from state to federal court, filing has to be made within the same state.

The banking group faced losses of about $3 billion to $4 billion on Clear Channel, a person familiar with the situation told Reuters on Wednesday.

The lawsuit filed in Texas claimed the banks interfered with the deal in an overt effort to "run out the clock" and cause the deal to collapse.

Clear Channel said that Judge John Gabriel of the Bexar County, Texas, district court issued a temporary order directing the banks not to interfere with the merger by refusing to fund it or demanding new terms. The order expires on April 8.

"This is a decision made having seen only the plaintiffs' papers," said Joel Greenberg, a New York attorney with Kaye Scholer LLP who is not involved in any of the litigation. "It obviously indicates some sympathy with their case, but it's hardly a decision on the merits."

Greenberg said the order will not change anything until April 8, when the judge will hold a preliminary hearing and hear all parties involved.

"It's the first step of many but one that banks would rather not have happened," he said.

"I don't think this necessarily means that the banks are going to be forced to fund the transaction today," said David Bank, analyst with RBC Capital Markets. "But it keeps the deal from falling apart for now."

San Antonio-based Clear Channel did not answer calls seeking comment. An outside spokeswoman did not immediately return a call seeking comment.

Citigroup spokeswoman Danielle Romero-Apsilos, who said she was speaking on behalf of the banking group, declined to comment on the temporary restraining order.

Other banks in the lending group are Credit Suisse Group (CSGN.VX), Deutsche Bank AG (DBKGn.DE), Morgan Stanley (MS.N), Royal Bank of Scotland Group Plc (RBS.L) and Wachovia Corp WB.N.

Clear Channel had agreed last May -- at the height of the private equity boom -- to be acquired by the private equity firms for $39.20 per share, the latest increase in the offer price for a deal that was first announced in November 2006.

Clear Channel shares closed Thursday at $29.60, up $2.73 or 10 percent, on the New York Stock Exchange.

The original agreement calls for a break-up fee of either $500 million or $600 million -- depending on the reason for a deal failure -- to be paid by the buyers under certain conditions. (Reporting by Jui Chakravorty, Jonathan Stempel, Megan Davies and Paritosh Bansal; Editing by Steve Orlofsky, Gary Hill, Phil Berlowitz)