* Policy should be focus of ANC summit
* COSATU calls for capital flows tax, exchange controls
* COSATU chief opposes "predator state"
* Government offers new enticements to state workers
By Peroshni Govender
JOHANNESBURG, Sept 14 (Reuters) - South Africa's ruling ANC and the most powerful labour union confederation COSATU will try to repair their alliance, hurt by strikes and alleged government cronyism, at a meeting to be held in the next two months.
COSATU said last week that its alliance with the African National Congress and the South African Communist Party faced paralysis and may even break up over policy differences.
But the ANC and COSATU said after a meeting of their leaderships late on Monday that a long-delayed alliance summit would be held in October or November.
COSATU said last month it could not convene the meeting with the ANC for fear of widening the rift between the long-standing allies at a time of labour unrest in Africa's biggest economy.
The alliance of the ANC, COSATU and small but influential Communist Party was forged in their struggle to end apartheid, and more recently helped President Jacob Zuma to power.
But it has been strained by a three-week public sector workers' strike and union complaints about what it sees as spreading cronyism in Zuma's government.
The ANC's discussions with COSATU took place a week before an ANC mid-term policy review session when the labour group could turn up the heat on Zuma to give unions a bigger say in policy formation.
"PREDATOR STATE"
COSATU raised the pressure on Tuesday by releasing economic policy proposals calling for the nationalisation of mines, a tax on short-term capital flows and a reversal of steps to relax exchange controls.
"We did not elect the ANC so it can be a predator state. We want an active state that is biased to the working class. Not through rhetoric but through policy," COSATU secretary-general Zwelinzima Vavi told reporters.
In a document outlining its economic proposals, COSATU said that removing exchange controls robbed South Africa of much-needed resources for investment.
COSATU's idea on exchange controls is at odds with the National Treasury's plans for further relaxation, with details due in next month's medium-term budget policy statement.
At its policy meeting next week, the ANC will discuss the idea of taxing short-term capital flows in an effort to limit gains of the rand currency.
The rand has risen about six percent against the dollar this year, adding to gains of around 30 percent in 2009. On Monday it closed firmer than 7.15 per dollar for the first time since January 2008.
COSATU wants the rand much weaker at 10 to the dollar to help manufacturers, hit hard last year by South Africa's first recession since 1992.
High unemployment lies at the heart of COSATU's gripes with ANC policies. More than a million jobs have been lost since the beginning of 2009, trapping millions in poverty and stoking social unrest.
Zuma is caught between pacifying his allies and stimulating economic growth in South Africa, where the recovery has lagged that of other emerging markets.
The government offered new enticements on Tuesday to 1.3 million state workers to accept its wage offer and formally end their strike which was suspended last week, union officials said.
The government has not changed its basic offer but would try to lessen the pain of lost wages felt by striking workers. (Additional reporting by Peroshni Govender, Phumza Macanda and Jon Herskovitz; Writing by Marius Bosch; Editing by David Stamp)