* Steps under consideration aimed at mid-sized firms
* Steinbrueck says won't throw billions more to banks
(Adds Steinbrueck quote, detail)
BERLIN, Aug 26 (Reuters) - German Finance Minister Peer Steinbrueck said on Wednesday he was examining measures to improve credit issuance to firms, though he dismissed any prospect of handing banks billions more euros in state aid.
German officials are concerned that tight lending conditions could worsen next year, a scenario which could throttle a recovery in Europe's largest economy just as it gets going.
Steinbrueck told a news conference in Berlin he was considering measures including the KfW state bank making loans to banks, provided they use the funds to finance the so-called "Mittelstand" -- the small- and medium-sized firms that form the economy's backbone.
The health of such firms is crucial to the German economy as they account for an estimated 70 percent of the workforce.
Another possibility was for the government to offer firms help with credit insurance, Steinbrueck said, adding: "It is not about me handing over billions more to the banks."
Business leaders have said they fear a credit crunch will hit German companies early next year just as firms seek to finance an economic recovery.
Banks face tight capital conditions and are looking carefully at potential borrowers to avoid repeating the mistakes made in the years of cheap credit that triggered a global financial crisis.
The state took a 25 percent plus one share stake in
Commerzbank
Steinbrueck also said he was not surprised about a newspaper report that troubled lender HRE may need more state aid on top of the billions of euros it has already received.
"That did not surprise me at all," he said when asked about the report in newspaper Bild.
Steinbrueck, a Social Democrat, is eager for a robust economic recovery in Germany as he campaigns for a federal election in September. Data released on Tuesday confirmed Germany emerged from recession in the second quarter.
A survey published by the European Central Bank late last month showed banks in the euro zone tightened credit standards again in the second quarter of the year and expected to do so further in coming months, albeit at a slower pace. (Reporting by Gernot Heller, writing by Paul Carrel, editing by Mike Peacock)