PRAGUE, Dec 7 (Reuters) - Czech President Vaclav Klaus will not sign a treaty change which helps create the euro zone's permanent bailout mechanism, making his country the only not to back the fund but without threatening its function.

Eurosceptic Klaus, who will finish his final term as president in March, has long beeen critical of EU plans and temporarily delayed signing the bloc's recent Lisbon treaty.

However, Klaus's decision not to back European Stability Mechanism (ESM) does not block the working of the bailout fund which is already up and running. It held its inaugural meeting in October after clearing its final hurdles the month before when ratified by Germany.

'I consider these shields (rescue funds) monstrous, senseless and an absurd thing, and I definitely will not sign them,' Klaus saying, according to Czech news agency CTK.

The Czech Republic, which is outside the euro zone but committed to joining one day, is the only European Union country not to have backed the institution. Klaus' move does not affect his country's dealing with the bloc.

Both chambers of the Czech parliament had given it a green light earlier this year, and it was only awaiting Klaus's signature.

'ESM was created on the basis of a intergovernmental agreement,' said Martin Stasek, a spokesman for the European Commission in Prague said.

'In a long-term perspective the goal is to include ESM in EU treaties. The fund is working now on the basis of this intergovernmental agreement, so its function is not threatened.'

ESM was set up to provide financial assistance to euro zone states experiencing or threatened by financing difficulties. The mechanism can raise funds and is backed up by 80 billion euros in paid-in capital.

It has capacity now of 200 billion euros.

The ESM treaty had needed ratification by countries representing 90 percent of its capital to be implemented, which was met with Germany's approval in September.

(Reporting by Robert Mueller,; Writing by Jana Mlcochova and Jason Hovet) Keywords: EUROZONE CZECH/ESM

(jana.mlcochova@thomsonreuters.com)(+420 224 190 479)(Reuters Messaging: jana.mlcochova.reuters.com@reuters.net)

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