* Says maximum theoretical exposure up to 1 trln eur
* Govt officials to discuss toxic assets plan on Tuesday
* BdB banking association calls for quick solution
BERLIN, April 21 (Reuters) - It is impossible to say how much money a 'bad bank' scheme in Germany would cost the taxpayer, though the maximum theoretical risk exposure would be up to 1 trillion euros, a senior German lawmaker said on Tuesday.
As leading government officials prepared meet later in the day to discuss how to free German banks' balance sheets of toxic assets to boost confidence in the sector, the country's banking association called for the issue to be addressed swiftly.
"No one can answer exactly the question that is always asked: how much will this cost ordinary citizens," Otto Bernhardt, a leading lawmaker in Chancellor Angela Merkel's Christian Democrats (CDU), told rbb radio.
Merkel hosts the meeting later on Tuesday, which will also be attended by Finance Minister Peer Steinbrueck and Bundesbank chief Axel Weber.
Bernhardt said he expected a bad bank model in Germany would involve the state issuing guarantees for banks' toxic assets.
"A risk remains for the taxpayer," he added.
Asked about a newspaper report that the state would have to pay out 800 billion euros if troubled assets all went sour, Bernhardt said: "That is a dangerous statement".
He said that if all assets at risk had no more value, then between 500 billion and a trillion euros would be at risk, adding: "This maximum risk is theory."
"Of the 2,500 banks in Germany, we are only talking about 20", with toxic assets problems, Berhardt said.
But he said it was essential to produce a bad bank plan.
"If we don't give these credit institutes the possibility to hive off these assets such that they no longer puncture their balance sheets, then (they) ... will not be able to issue sufficient credit for years," Bernhardt said.
"We must therefore solve this problem."
The BdB banking association called for a swift solution.
"We expect this matter to finally get off the ground," BdB President Andreas Schmitz told ZDF television.
A government spokesman said on Monday that Germany aims to have a bad bank plan ready by the summer break in July.
(editing by John Stonestreet)