* Commission has three months to consider proposal
* Private sector says can be more efficient than public
* Initiative aimed at bringing law-making closer to people
By Barbara Lewis
BRUSSELS, Jan 13 (Reuters) - Water and who should provide it - the public or private sector - has become the first issue to be pushed onto Brussels' policy agenda via a new mechanism meant to involve ordinary people in EU decision-making.
The EU Citizens' Initiative was introduced in 2012 following changes to the EU treaty that were designed to bring law-making closer to the EU's 500 million people.
It gives citizens the right to make policy proposals on any issue as long as they have secured 1 million signatures spread across at least seven of the EU's 28 member states - although it does not guarantee lawmakers will pass legislation.
Late in December, organisers of the Right2Water initiative formally submitted their proposal after exceeding the threshold.
They say the human right to water should be enshrined in EU law and that public, not private companies should be responsible for providing water services.
A public hearing on the proposal, expected in February in the European Parliament, could be heated as some member states, such as Portugal, are aiming to sell off state water companies to pay off debt, while others already have private ownership.
The Commission, the EU's executive, said it was too early to say what the outcome of the citizens' initiative will be.
"It's rare that we have something this new," Olga Kurpisz, a policy officer at the Commission, said. "This is a very new instrument. It's an historic experience, which is taking place in the EU. It's difficult. The outcome is unknown."
Under the rules, the Commission has three months to analyse the proposal. It can either agree to it in principle, say it needs more time to consider it, or reject it. If it does that, it has to give reasons, which can be legal or political.
Those who organised the initiative are adamant that water, as "a common good", should be in public hands.
"It's hugely threatened by multinationals. Multinationals are there to make profit and reimburse shareholders, rather than to satisfy citizen's needs," said Anne-Marie Perret, president of the Right2Water Citizens' Committee.
Representatives of the private-sector water industry say recognition of the human right to water in EU law would be helpful, but argue privatisation is often the most cost-effective way to deliver supplies.
AquaFed, the International Federation of Private Water Operators, which represents more than 300 companies in 40 countries, quotes Britain as an instance of privatisation delivering a critical service cost-efficiently.
The more than 1.8 million citizens who signed the Right2Water initiative came from across the European Union, but more than half of them were from Germany.
Perret said that was a happy accident. The committee had been struggling to get signatures, which need to be backed up by passport details, until a German comedian Frank-Markus Barwasser, known to his fans as the bumbling, hat-wearing Erwin Pelzig, independently raised the issue on German television.
"Eighty percent of Europeans don't want private water," Pelzig ranted in the comic sketch. (Additional reporting by Robert-Jan Bartunek; Editing by Alison Williams)