* Japan brushes aside China's proposal for reserve currency
* G20 to discuss demand, financial reform, protectionism
* Japan sees no split opinions over fiscal spending at G20
By Tetsushi Kajimoto and Yuzo Saeki)
TOKYO, March 27 (Reuters) - Group of 20 leaders are unlikely to discuss the status of the dollar as the world's reserve currency when they meet in London on April 2 to tackle the global financial crisis, a senior Japanese official said.
Instead, leaders and finance ministers of the leading developed and emerging economies will discuss ways to shore up global demand, financial market regulatory reform, change at the IMF and World Bank, and avoiding trade protectionism, the official said.
National differences are seen blocking progress on international banking oversight and agreement on how much governments need to spend.
The United States has led calls for government to spend more to lift economic activity but European leaders have made clear they will not heed that call.
But the official said G20 members were not split over fiscal spending.
"Each country is taking fiscal steps in accordance with its own situation," the official told reporters on condition of anonymity. "The same goes with Japan as the ruling parties are mulling over necessary steps."
The finance ministry official shrugged off China's proposal for a sweeping overhaul of the global monetary system, which suggested the International Monetary Fund's Special Drawing Rights (SDRs) could replace the dollar as a super-sovereign reserve currency.
"There was a discussion like China's proposal when the SDR was created," the official said.
The SDR was created in 1969 as an international reserve asset allocated to IMF member countries and is based on a basket of international currencies made up of the dollar, euro, the yen and British pound.
"At this moment no one is discussing the need to seek a replacement for the dollar as a key currency.
"As a long-term issue, there is discussion as to whether the dollar-centred currency system should be changed, but I don't expect such a discussion to take place at this meeting." (Reporting by Tetsushi Kajimoto and Yuzo Saeki)