* Germany confirms Weber to leave Bundesbank early
* Move throws open ECB succession race
* Berlin signals non-German okay, Italy backs Draghi
(Recasts with Weber leaving Bundesbank)
By Noah Barkin and Annika Breidthardt
BERLIN, Feb 11 (Reuters) - Axel Weber will step down as head of the Bundesbank a year before his term ends, the German government said on Friday, formally ending his chances of becoming the next president of the European Central Bank.
Reuters reported on Wednesday that Weber planned to remove himself from consideration for the top ECB post held by Frenchman Jean-Claude Trichet and leave the Bundesbank early, but Friday's statement was the first official confirmation.
"Bundesbank president Axel Weber told German Chancellor Angela Merkel that he would like to step down on April 30, 2011 at the end of his seventh year in office," government spokesman Steffen Siebert told Reuters.
"The chancellor and Finance Minister Wolfgang Schaeuble took note of his decision with respect for his personal reasons," he added, without elaborating. "A successor will be communicated during the course of the next week."
The Bundesbank confirmed his departure.
The 53-year old Weber, an inflation-fighting monetary "hawk" who left a meeting with Merkel and Schaeuble in the chancellery on Friday without speaking to reporters, was widely seen as the frontrunner to replace Trichet when his term ends in October.
His withdrawal has thrown the ECB race wide open and fed unease in financial markets about the ability of divided European policymakers to solve the euro zone's sovereign debt crisis.
The ECB has played a crucial role in responding to the crisis, buying the bonds of debt-stricken peripheral euro zone countries as part of a concerted push to calm markets. Weber's public criticism of that decision may have cost him the top job.
The Frankfurt-based central bank stepped into the markets for the first time in two weeks on Thursday to buy Portuguese bonds, traders said, after yields hit euro-era highs on concerns about perceived slow progress on solving the year-long debt crisis.
ITALY BACKS DRAGHI
Earlier, Schaeuble suggested that Germany could accept a non-German in the prestigious ECB post, but told reporters that the priority was agreeing a "comprehensive package" to help stem the bloc's debt woes.
"Germany has never insisted that the next ECB president be a German," Schaeuble said after talks with the French economy minister and French central bank chief.
"We now want to solve the question of institutional reform in the Eurogroup," he said. "Once that is solved we will discuss the question of who is the best candidate (for the ECB)."
Italian Economy Minister Giulio Tremonti said Europe should find the most competent person for the job independent of their nationality, but also described his countryman Mario Draghi, the Bank of Italy governor, as an "excellent" candidate.
Weber's withdrawal is a blow to Merkel's drive to secure the ECB post for a German and could raise pressure on her to impose tough German-style fiscal rules on euro zone partners to satisfy voters in a year of seven state elections.
The news comes ahead of two crucial summits -- on March 11 and March 24-25 -- at which European leaders want to agree a comprehensive package to resolve the debt crisis.
Germany and France want their "competitiveness pact" to be part of the broader package, in return for agreeing to strengthen a 440 billion euro bailout fund.
French Economy Minister Christine Lagarde said Paris would try to incorporate one proposal in that pact -- a German-style "debt brake" imposing strict limits on issuing government debt.
"In the coming months, before the end of 2011, we will look into incorporating in the constitution rules that permanently secure a balanced budget," she said.
Leaders from the 17-nation euro zone are expected to approve a successor to Trichet by summer and will take their cue from Merkel and French President Nicolas Sarkozy.
Italy is pushing the candidacy of Draghi but other contenders include Luxembourg's Yves Mersch and Finnish central Bank chief Erkki Liikanen, a monetary policy moderate.
The leading contenders to replace Weber at the Bundesbank include Jens Weidmann, Merkel's economic adviser, and ECB executive board member Juergen Stark. (Additional reporting by Gernot Heller, Eric Kelsey, Brian Rohan and Christiaan Hetzner; writing by Stephen Brown and Noah Barkin, editing by Mike Peacock)