* Rich and poor deadlocked at talks in Cancun
* Failure would be major new setback after Copenhagen (Adds quotes from EU Commissioner, Britain, UN, Tuvalu)
By Robert Campbell and Russell Blinch
CANCUN, Mexico, Dec 8 (Reuters) - The world's governments struggled on Wednesday to break a deadlock between rich and poor nations on steps to fight global warming and avert a new, damaging setback after they failed to agree a U.N. treaty last year in Copenhagen.
Several ministers warned that failure at the talks in Cancun, Mexico, could undermine faith in the ability of the United Nations' 194 member states to tackle global problems in the 21st century as power shifts toward emerging nations led by China and India.
"I think that what is at stake here is also multilateralism," said European Climate Commissioner Connie Hedegaard. "It's absolutely crucial that this process, which is the only one we have ... can prove that it can deliver results."
The talks in this Caribbean beach resort from Nov. 29 to Dec. 10, have more modest ambitions than at Copenhagen last year, but there are still yawning gaps over the future of the Kyoto Protocol for curbing greenhouse gas emissions by rich nations until 2012.
Japan, Canada and Russia say they will not extend the pact unless poorer nations also commit to emissions cuts. Developing nations insist the rich world must lead by setting deeper cuts beyond 2013 before they take on curbs.
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"I believe that an ambitious, broad and balanced package is within reach," Mexican Foreign Minister Patricia Espinosa told delegates, looking tired after 10 days of talks. "That does not mean that we already have it in our grasp."
Negotiators want to set up a new fund to help developing countries combat climate change, work out ways to protect tropical forests, help poor nations adapt to climate change and agree a new mechanism to share clean technologies.
MODEST GOALS
Failure to achieve even those modest steps would be a blow after U.S. President Barack Obama and other world leaders could only manage a vague, non-binding deal in Copenhagen in 2009, when many had pinned hopes on a treaty.
"A car crash of a summit is in no one's interest," said Britain's Climate Change Secretary Chris Huhne.
Some countries linked deadlock in Cancun to Obama's failure to pass U.S. legislation to curb climate change. All other industrialised nations have already capped their emissions under the Kyoto Protocol.
"We cannot afford to be held hostage by the political backwardness of one developed country," said Tuvalu's deputy prime minister, Enele Sosene Sopoaga. "This is life and death, a survival issue for Tuvalu," he said of rising sea levels.
Confidence in the U.N. talks has already been hit by Copenhagen, which agreed only a non-binding deal to limit a rise in average world temperatures to below 2 degrees Celsius (3.6 F) above pre-industrial times.
Without success in Cancun, faith in the seemingly endless U.N. talks, which require unanimous support for any accords, could wither away.
"I think the U.N. process has real problems, potentially fatal," said Robert Stavins of Harvard University. "Anything under the United Nations tends to polarise developing and industrialised countries."
U.N. Secretary-General Ban Ki-moon urged progress towards working out how to raise ${esc.dollar}100 billion a year in aid from 2020, promised under a 140-nation deal in Copenhagen to help poor nations combat global warming.
"It is not a panacea for the climate problem, but it is crucial for building trust," he said. Draft U.N. texts circulating in Cancun give options both of ${esc.dollar}100 billion, and a far higher 1.5 percent of rich nations' gross domestic product.
Norwegian Prime Minister Jens Stoltenberg warned developing nations against ignoring the Copenhagen Accord and demanding more. There were risks that some rich nations, facing austerity at home, might simply respond by offering less, he said. (Writing by Alister Doyle; Editing by Kieran Murray)
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