UPDATE 1-Vattenfall to announce new CEO soon

* Vattenfall's handling of grid sale issue criticized

* CEO says has full support of board

STOCKHOLM, Nov 13 (Reuters) - Swedish power group Vattenfall AB [VATN.UL] said on Friday it would announce a new chief executive in the near future, but denied any connection with pressure on current CEO Lars Josefsson to step down.

Josefsson was at the centre of a media storm after Sweden's government expressed concern over reports Vattenfall, which is owned by the state, wanted to sell the country's electricity grid to invest in British nuclear power.

Criticism from Enterprise Minister Maud Olofsson over the way Vattenfall handled the matter led to speculation Josefsson would have to resign within weeks.

But Josefsson told Reuters he still had the full support of Vattenfall's board of directors and had not faced demands to step down, except from a trade union.

"I have in my contract the right to retire next year and in the spring I notified my chairman that I intended to do that," Josefsson said in a telephone interview. "In the spring we started a search process that is close to being finalised."

Earlier on Friday, a spokesman said Vattenfall would soon announce the name of a successor for Josefsson and denied any link with media speculation over his resignation.

"There will probably be (an) announcement in the near future," said Mark Vadasz, head of media relations.

Vadasz said he could offer no details as to when the successor would take over, adding there was "no connection" between the timing of the announcement and speculation about Josefsson's career.

GRID SALE?

The European Commission wants to force power utilities such as Vattenfall to separate their generating and distribution businesses to spur competition in Europe's energy markets.

Last week, sources told Reuters Germany's E.ON AG (EONGn.DE), the world's largest utility, was set to sell its German long-distance power grid. Josefsson said a sale of the Swedish grid was being reviewed as part of wider discussions on unbundling power generation and distribution, but was rejected because of timing considerations.

"The question of the grid (sale) is something that we more or less have under constant strategic review," he said. "We have come to the conclusion that, at this moment in time, it's not an opportune time."

Josefsson also dismissed a Swedish media report linking the possible sale of the Swedish grid with efforts to raise money to invest in nuclear power in Britain.

"It was said that we should use the proceeds to buy British nuclear," he said. "This is totally untrue and 100 percent fabricated."