* Spain Econ Min Salgado rules out cut in firing costs
* Salgado says temporary contracts should be reduced
By Jason Webb
MADRID, May 28 (Reuters) - Spain's economy minister on Thursday promised the government would not cede to business demands to make it easier to fire workers, seemingly contradicting her deputies who had called for labour reform.
A severe recession has caused Spanish unemployment to almost doubled from its 2007 low point to four million, and business leaders say that cutting back rules protecting jobs is crucial to reviving the labour market and economy.
"If by labour reform, you mean reducing workers' rights, introducing a single type of working contract and making it easier to fire workers, well I think that's absolutely not what the government wants," Economy Minister Elena Salgado told Cadena Ser radio.
She said any labour reform should concentrate on reducing the high proportion of Spanish workers on temporary labour contracts.
Her remarks contrasted with comments on Wednesday by one of her deputies, Treasury Secretary Carlos Ocana, who said Spain had to reform its labour market which he blamed for high unemployment. For story, click on [ID:nLR473920].
Spain's biggest union, Comisiones Obreras, hailed Salgado's remarks, saying in a press release that she had "to a large degree cleared up the concern generated yesterday" by Ocana.
Unions have threatened a strike if worker benefits are cut.
Salgado's comments followed statements last week by her newly appointed second in command, Economy Secretary Jose Manuel Campa, in support of a proposal by 100 leading economists for a new single contract to level out firing costs.
Many economists say that the relative difficulty and expense of firing workers on long-term contracts in Spain has led employers to prefer lower skilled, less highly paid temporary employees who have far weaker job protection.
Highly concentrated in the construction and services industries, these workers are now being laid off in droves, pushing up unemployment more quickly than in any other major economy.
Salgado said that Spain needed other reforms to improve its competitiveness, including changes to its education system and more efficient public services to reduce business costs.
"After we have done all that it will be the moment to talk about the labour market," she said. (Reporting by Jason Webb; Editing by Toby Chopra)