By Andrew Hay and Natsuko Waki

MADRID, May 5 (Reuters) - ADB President Haruhiko Kuroda called on Monday for determined action to secure food supplies for Asia's poorest people as a battle brewed among the Bank's backers over how to fund a growing crop of projects.

"The global fight against poverty will be won or lost in our region," Kuroda said in a keynote speech to delegates at the Asian Development Bank's Annual meeting.

"Soaring food prices are hitting the poor very hard. This price surge has a stark human dimension and has greatly affected over a billion people in Asia and the Pacific alone," he said.

Asia is home to two thirds of the world's poor and risks rising social tension as a doubling of wheat and rice prices in the last year has slammed people who spend more than half their income on food.

Citing grain stocks at their lowest levels in decades, turmoil in global financial markets and an uncertain outlook for the world economy, Kuroda made a plea for "money and ideas" to boost development and rescue millions of people from poverty.

But the call for action is accompanied by a need to rapidly accelerate the ADB's investment programme, particularly its core portfolio of infrastructure project lending, funded by loans linked to market interest rates.

Sources inside the ADB say that to meet the soaring demand for assistance, the Bank must substantially increase its capital base from its current $56 billion.

If it doesn't, the ADB's core non-concessional lending activity -- some $8.2 billion of the 10.1 billion it invested in total in 2007 -- risks being slashed.

"The absence of such measures could seriously undermine the global fight against poverty and erode the gains of past decades," Kuroda said. Spain's Economy Minister Pedro Solbes, who as host of the ADB meeting this year chairs the board of governors, appeared to throw his weight behind the case for more money.

"The Bank will need necessary resources... and will have to identify a new source of financing from new business areas with adequate mechanisms that adjust to the developing needs of Asia," he said in a speech to delegates.

"We are eagerly awaiting a debate on increasing capital in the future. The bank has to be more effective in its analysis and operations. The process of reform has begun."

The U.S., a leading ADB donor, has criticised the Bank for failing to focus lending on the very poor, for lacking accountability and for investing too much money in middle-income economies like China and India.

Washington voted against the ADB's "Strategy 2020" plan, which focuses on regional integration, though it was approved by the Bank's board this month despite U.S. opposition.

Unease with the ADB's lending activities was evident on Monday in the Philippines capital Manila, the Bank's headquarters, where around two dozen people demonstrated against the bank's role in privatisation deals and blaming the lender for failing to do more to combat rising food prices.

"In its 41 years of existence, the ADB has brought very little development to poor countries in the region, but left them heavily indebted," Eman Hizon, one of the protesters, told Reuters.

The demonstrators criticised ADB's support for the privatisation of state-owned utility firms, particularly those involved in power and water.

Dozens of anti-riot police officers watched from a distance, allowing the small but noisy group to protest for about an hour before the demonstration broke up peacefully.

The Asia-Pacific has three times the population of Europe -- around 1.5 billion people -- living on less than $2 a day.

Rice is a staple food in most Asian nations and any shortage threatens instability, making governments extremely sensitive to its price.

If food prices rise 20 percent, 100 million poor people across Asia could be forced back into extreme poverty, warned Indian Finance Secretary D. Subba Rao on Sunday.

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