By Leticia Augusto and Ricardo Brito

SAO PAULO/BRASILIA (Reuters) -Brazilian government officials have warned that the TCU federal audit court on Wednesday may further delay a ruling on the privatization of Eletrobras, which could derail plans to complete the process before this year’s election.

For months, TCU auditors have reviewed the plan to relinquish state control over Eletrobras, or Centrais Eletricas Brasileiras SA, Latin America’s largest utility. The company has proposed a share sale to raise least 25 billion reais ($5.4 billion) while diluting the government’s stake to make it a minority shareholder.

Judge Vital do Rego asked for another 60 days to study the plan further, while three other members asked for just seven days. The seven TCU judges have to vote on the extent of the delay.

A two-month delay would effectively disrupt the timeline to privatize the company this year.

That would be a setback for President Jair Bolsonaro, who will seek re-election in October and has so far delivered little of the ambitious privatizations he pledged on taking office. The same court source said Economy Minister Paulo Guedes had pressed the TCU hard to endorse the Eletrobras sale as soon as possible.

Opposition politicians from the leftist Workers Party filed injunction requests in federal court and at the TCU this week to try to prevent the privatization.

Eletrobras shares, which have risen and fallen on the prospects for privatization, surged 7.4% in mid-afternoon trading in Sao Paulo.

The calendar for privatization is tight. The ideal window for the stock offering closes in mid-May, which would require the deal to launch by the end of this month, according to a banker familiar with the matter.

The banker, who spoke on condition of anonymity, said there was no way to offer the shares without defining the minimum share price – one of the key points in the TCU review.

Government officials told Reuters a request for more time would “kill” the process for this year, as the approaching election is likely to deter investors, some of whom have explicit restrictions on investments during campaign season.

“If it is delayed, the chance of being able to raise 25 billion reais is very low,” one official said.

Do Rego has criticized the sale from the start, raising concerns about the impact on electricity rates as well as value of renewal fees for hydropower concessions. He asked in December for more time to study the plan.

In February, the TCU removed one obstacle to the operation, approving the 25.3 billion reais in hydropower concession fees that Eletrobras would pay to the government on concluding its privatization.

For the company’s part, it must still approve 2021 financial results at a meeting scheduled for April 22 and publish a Form 20-F with the Securities and Exchange Commission (SEC) on April 25 before it can release a prospectus for the offering.

($1 = 4.6588 reais)

(Reporting by Leticia Augusto Fucuchima and Ricardo Brito in BrasiliaAdditional reporting by Rodrigo Viga Gaier in Rio de JaneiroWriting by Anthony BoadleEditing by Brad Haynes, Mark Potter and Marguerita Choy)