* German banks can't be obliged to disclose tests
* Government to find way round banking law
* Banks won't be forced but will feel market pressure
(Corrects title of ministry spokesman in paragraph two)
By Stephen Brown and Matthias Sobolewski
BERLIN, June 18 (Reuters) - The German government will check how banking laws can be interpreted or changed so that stress tests can be made public, but will rely on peer pressure rather than forcing reluctant lenders to disclose, it said on Friday.
The German government will not oblige banks to reveal test results but they will feel "high pressure to disclose because the markets see who has published and who hasn't", said German Finance Ministry spokesman Michael Offer.
German law currently prevents lenders from being obliged to disclose such information but the country is now, along with its European Union partners, in favour of making such data public to help restore shaken confidence in the banking industry.
Leaders of the 27-member EU agreed unexpectedly on Thursday to carry out more transparent checks of the financial health of their top banks as part of measures to convince investors that Europe can contain the euro zone debt crisis.
The finance ministry spokesman, asked by Reuters at a news conference about paragraph nine of the German law on banks which refers to data protection and disclosure, responded: "I can only say that we must check it further."
"I believe that paragraph nine applies to individual finance institutions and also we have to see in what form this paragraph nine would permit publication, or rather what needs changing in order to meet the goals that were discussed yesterday," he said.
Asked if the government would rely on voluntary disclosure by banks or wanted the law changed, he said: "The idea of making this voluntary played a role, I believe, yesterday evening (at the EU summit), if I've understood the statement correctly."
Financial regulator Bafin and probably the central bank would have to be consulted, Offer said, adding: "We will do what we think is necessary to restore the confidence of the markets."
DAMNED IF YOU DON'T
"Strong banks won't hesitate to make their results public, which means no bank can afford not to disclose its results without running the risk of being seen as weak," wrote Merck Finck's banking analyst Konrad Becker in a report.
EU leaders said at the summit that stress tests on the top 25 banks in the bloc would be published in late July. Germany was initially reluctant to disclose the results for individual lenders but came out in support of this ahead of the summit.
Germany's VOB association of public-sector banks has spoken out against publicising the results of individual banks' tests, but banking industry analysts said it would look suspicious if German banks did not comply while other EU banks went ahead.
"It would quickly arouse suspicions that the Germans have something to hide," said Equinet analyst Philipp Haessler, who added: "I see no problem for the big listed banks."
The same might not be true of some of Germany's state-backed regional Landesbank lenders, whose top three players LBBW, Munich's BayernLB and Duesseldorf-based WestLB were caught out in the financial crisis.
They suffered big losses which forced them to seek bailouts from their public-sector owners.
(Additional reporting by Sarah Marsh and Angelika Gruber; writing by Stephen Brown; Editing by Ron Askew)