* EU presents last minute proposal on industrial tariffs
* Key players US, China to study plan
* Mood still despondent as talks near 10th birthday
* WTO chief Lamy says to consult ministers in May
(Updates with finalised comments from U.S., China)
By Andrew Callus
GENEVA, April 29 (Reuters) - The European Union presented a last-minute plan to keep hopes alive for a new global free trade deal on Friday, telling weary and sceptical negotiators there were still avenues to explore after 10 years of trying.
Unveiled at a meeting of World Trade Organization (WTO) member countries, the plan aims to find some middle ground between the United States and major emerging economies, especially China, on the main sticking point of the discussions -- tariffs on industrial goods.
"Our view has always been that not all options and avenues in this market access area had been explored," said Jean-Luc Demarty, European Commission Director General for Trade.
"This is why we felt we should formulate ideas to stimulate further engagement," he told the meeting of the 153-member WTO's Trade Negotiations Committee. Gaps can close "if the political will is there," he said.
The so-called Doha Development Round of talks which began in 2001 in the Qatari city are complex and cover all areas of barriers to trade in industrial goods, services and agriculture, but the industrial tariffs row goes to the core of the blockage.
The United States and China both said they would study the idea, but U.S. ambassador Michael Punke said he did not subscribe to the view that a breakthrough on industrial tariffs would mean a breakthrough for the whole round.
"Fundamental differences also exist with respect to agriculture and services," he said.
Nevertheless he said the plan did offer a way forward. "We can't know what the outcomes might be but we can certainly know very quickly whether or not it can catalyse negotiations," Punke told reporters outside the meeting.
A Chinese official said the world's number one exporter would also study the EU plan. China's Ambassador Yi Xiaozhun made no direct reference to it in his statement, in which he bemoaned a loss of idealism in discussions over the years.
"We are very much concerned that the development objective and mandate may have been marginalised," he said. India also criticised what it called the increasingly "mercantalist" approach to the talks.
DESPONDENCY
China, India and Brazil entered the talks with developing country exemptions which the United States now challenges given their emergence as export powers.
The big three developing nations want to keep their status, and point out that the round was launched partly to correct some of the trade imbalances of the existing General Agreement on Tariffs and Trade.
The EU's proposal, a copy of which was obtained by Reuters on Thursday, focuses on tariffs for chemicals, machinery and electronics and seeks an approach that is tailored for different products.
It keeps the zero-for-zero tariff approach favoured by the United States for some, but seeks more modest reductions in others to a tariff level somewhere between what the big developing countries are entitled to according to their status, and the zero that the United States wants to see.
It aims to succeed where months of U.S.-China bilateral talks have failed, but did little to lift the mood of despondency at the WTO's Geneva lakeshore headquarters.
Several diplomats used the word "disappointment" to describe their feelings on the failure to produce any real movement since the last push for completion took place in 2008.
Some farm export countries were sceptical of the EU's motives. One said the EU may be looking to distract attention from its own sins against free trade in farming subsidies.
Still, diplomats were "appreciative that the EU has revived the spirit of the talks," said one ambassador from a G7 nation.
$15 TRLN MERCHANDISE TRADE LAST YEAR
The Doha talks aim to keep at bay the self-defeating spiral of tariffs, subsidies and quotas that can choke trade and, economists argue, global prosperity.
With $15 trillion of goods changing hands last year around the globe, no country wants to be blamed for stabbing the policeman of commerce through the heart.
Some delegates wanted to make clear that the WTO itself is "bigger than Doha" -- a clear suggestion that they still fear failure for the round and are looking at damage limitation.
Others suggest an "early harvest" where those areas where negotiators do agree get signed and sealed without the tricky ones. China is one supporter of that approach.
WTO Director-General Pascal Lamy, who has staked his reputation on getting a deal done this year, begged countries not to return to the "law of the jungle".
Lamy told delegates that from here on he would consult in various configurations, including at the ministerial level, in APEC and at an OECD meeting on May 26. (Editing by Stephanie Nebehay and Philippa Fletcher)