* Africa scales back finance demands
* Accepts European proposals on rich nation funds
* China says supportive
(Adds China and U.S.)
By Gerard Wynn
COPENHAGEN, Dec 16 (Reuters) - African countries softened their demands for climate finance from rich nations on Wednesday, a shift that could remove a core obstacle in United Nations talks.
"I know my proposal today will disappoint some Africans," said Ethiopian Prime Minister Meles Zenawi, on behalf of all African nations.
"My proposal scales back our expectation with respect to the level of funding in return for more reliable funding."
Speaking at U.N. climate talks meant to agree a global climate pact, Zenawi supported $100 billion annual funds by 2020 from rich nations to help the developing world fight climate change.
He also supported $10 billion per year short-term funding from 2010-2012, exactly in line with suggestions by the European Union and the United States.
When asked for a response, Chinese negotiators said they could not comment directly on the figure but expressed backing for the stance of African nations.
"China has always been supportive of the developing countries strong position and just demands on the financing issue," said Climate Change Ambassador Yu Qingtai.
China has already said it does not expect to be first in line for any funds from the rich world. Yu's comments suggested that Beijing would not stand in the way of a deal backed by most of the developing world.
The European Union has previously proposed rich nation funds by 2020 of about $150 billion. British Prime Minister Gordon Brown has spoken of $100 billion.
U.S. chief climate envoy Todd Stern declined immediate comment on the African proposal -- "I have heard there is one (proposal on finance) but I haven't seen the details yet so we will be interested in looking at it."
Zenawi said funding to help the developing world prepare for climate change and curb carbon emissions should start by 2013, reaching "up to $50 billion per annum by 2015 and $100 billion per annum by 2020."
"No less than 50 percent should be allocated to adaptation to vulnerable and poor countries and regions such as African and small islands states."
The Catholic development group CAFOD said Zenawi had gone too far with his compromise.
"At this late stage of the negotiations, this figure being tabled by Africa is disappointing to say the least," said Liz Gallagher, CAFOD's climate finance specialist, adding the Africa group earlier this week had demanded $400 billion per year.
Rich countries could raise the funds using a wide range of mechanisms, including taxes on shipping and jet fuel or sales of emissions rights, said Zenawi -- hinting Africa would not insist on public money.
Developing countries have so far insisted that funds should come from public sources, something that recession-hit, industrialised countries have rejected saying only the private sector can raise the sums required. (Reporting by Gerard Wynn and Emma Graham-Harrison, Editing by Janet McBride)