* Zimbabwe central bank to be reformed
* South African support seen as crucial
* Appeal for Western donors' help (Repeats with bullet points; no changes to main text)
By MacDonald Dzirutwe
HARARE, Feb 15 (Reuters) - Zimbabwe's new finance minister said on Sunday he would reform the central bank and that help from regional power South Africa was crucial for recovery.
Tendai Biti from the MDC, appointed finance minister last week under a power-sharing government with President Robert Mugabe, said he would present a new budget to parliament and urged Western donors to help rebuild the country.
"The Reserve Bank has totally discredited itself," he told Reuters in an interview.
"We must accept that the Reserve Bank is at the core of this economic decay. I make no apologies for those statements."
Analysts say the central bank has helped ruined the economy by printing money and providing trillions of Zimbabwe dollars to state companies and government departments outside the budget, which has fuelled inflation, the world's highest.
Prime Minister Morgan Tsvangirai's MDC wants to curtail the Reserve Bank's operations and wants it to focus on taming inflation and exchange rate management the bank operates independently from the government.
That could set Biti against central bank chief Gideon Gono, a Mugabe ally, at a time when strong cooperation between government officials is needed to rescue the battered economy.
Biti said he would meet Gono soon. He did not give details.
The new unity cabinet already faces a credibility test just a few days after new ministers were sworn in.
A senior MDC official, Roy Bennett, has been charged with planning terrorism and insurgency and is expected to appear in court on Monday, his lawyer Trust Maanda said.
Foreign investors and Western donors want concrete signs of stability in Zimbabwe. They have made it clear that funds will not flow to the nation until a democratic government is created and economic reforms are made.
SOUTH AFRICAN SUPPORT
Biti said Zimbabwe was looking to South Africa, the continent's biggest economy, for help.
"South Africa is going to be key in the support it will give to Zimbabwe either as budgetary support or lines of credit," Biti said.
South African Finance Minister Trevor Manuel told Reuters last week that South Africa stood ready to coordinate financial support for its impoverished neighbour Zimbabwe, whose economy has continuously contracted in the last decade.
South African President Kgalema Motlanthe has said that Zimbabwe could adopt its rand currency.
Zimbabwe's economy is in free fall and its dollar virtually worthless, leading the government to allow the use of the U.S. dollar, the rand and other currencies. Hyperinflation and shortages have forced many Zimbabweans to buy basic goods in South Africa, the continent's biggest economy.
Biti said adopting the rand currency would not resolve the country's problems without a package of economic reforms.
"Using the rand on its own without addressing fundamentals that have led to this economy where we are will not work. It doesn't benefit Zimbabwe or South Africa," said Biti.
The finance minister said he would engage Western donors who are sceptical of the power-sharing government with Mugabe and have set conditions for the release of aid.