* Greek parliament backs proposal to seek reparations
* Germany says reparations issue settled long ago
* Many Greeks blame Germany for painful austerity measures (Recasts with result of vote, more background)
By Renee Maltezou and George Georgiopoulos
ATHENS, April 17 (Reuters) - The Greek parliament voted on Wednesday to launch a diplomatic campaign to press Germany to cough up billions of euros in damages for the Nazi occupation of the country in World War Two, an issue Berlin says was settled long ago.
Greece suffered hugely under Nazi German rule and a parliamentary commission in 2016 put the cost at more than 300 billion euros, though Wednesday's proposal - backed by both ruling coalition and opposition lawmakers - mentioned no figure.
The vote, the first official decision by parliament on the emotive reparations issue, is likely to further strain ties with Germany, blamed by many Greeks for painful austerity measures imposed in return for bailout loans during its financial crisis.
The proposal, which comes ahead of national elections due in October, calls on the government to take "every appropriate legal and diplomatic action to satisfy Greece's demands".
"This claim is our historic and moral duty," Prime Minister Alexis Tsipras said at the end of a nearly 12-hour debate which concluded with the vote on the proposal submitted by parliamentary speaker Nikos Voutsis.
"To build a better future we need to close the open cases of the past and Germany needs to do the same," he said, adding that Athens would raise the issue diplomatically with Berlin.
ISSUE "CONCLUSIVELY SETTLED"
Germany has in the past apologised for Nazi-era crimes but has not been willing to reopen talks on reparations. Then-West Germany paid Greece the sum of 115 million deutschmarks in 1960 as reparations for its wartime suffering.
"The question of German reparations has been conclusively settled, both legally and politically," German government spokesman Steffen Seibert said on Wednesday. "We are, and I hope you can believe us, aware of our historic responsibility."
Greece has emerged in the past year from a decade of austerity imposed by international lenders in return for bailouts that kept it afloat after the debt crisis erupted in 2010.
Tsipras, a leftist, said his government did not want to link the two issues, responding to criticism over the parliament's delayed response to the report on the matter issued in 2016.
"We could never put the absolute evil of Nazism... on a scale," he said. "No slaughter, no monstrosity, not even one drop of blood could be balanced against any bailout."
Nazi Germany invaded Greece in May 1941, raising the swastika over the Acropolis in Athens. About a thousand Greek villages were razed during the war, thousands died of starvation and tens of thousands of people killed in reprisals by German forces trying to crush Greek resistance.
The parliamentary committee in 2016 assessed the occupation cost as at least 269 billion euros ($304 billion), rising to over 300 billion euros with the inclusion of an amount the Nazis forced the Bank of Greece to hand over in 1942.
That "occupation loan" also helped bankroll Hitler's military campaign in North Africa.
Kyriakos Mitsotakis, leader of the conservative New Democracy Party which is leading in opinion polls, said any future government led by him would seek to recoup that occupation loan.
($1 = 0.8846 euros) (Additional reporting by Andreas Rinke and Thomas Escritt, editing by Michele Kambas and Gareth Jones)
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