(Adds Batasuna paragraph 4, Popular Party paragraph 8,9)

MADRID, May 6 (Reuters) - Spain's Supreme Court has banned Basque nationalists from standing in regional elections on May 27 because of links to outlawed separatist party Batasuna, court documents showed on Sunday.

The judges, after 18 hours of overnight deliberation, banned the Abertzale Sozialistak (AS) group, saying it was a front for Batasuna, outlawed since 2002 for links to armed guerrillas ETA.

Batasuna has the support of about one in seven voters in Spain's northern Basque Country, but the party has refused to meet government demands to condemn violence to be able to participate in the May local government elections.

Batasuna spokesman Joseba Alvarez said the court's decision was a "fix", in comments reported on local radio and on the Web site of newspaper El Pais on Sunday.

On Wednesday, Batasuna had said banning its supporters could scupper chances for a peaceful solution to the four-decade-old Basque conflict.

In addition, the court banned 133 lists of candidates or half of the candidates standing for Basque Nation Action (ANV), which the government believes has been infiltrated by ETA's political ally.

But the court ruled that another seven lists of independent candidates, which the Spanish government also wanted to ban because of links to Batasuna, were free to run for election, the documents showed.

The leader of the opposition Popular Party, which wants the whole of ANV banned, said the Supreme Court's decision meant that ETA and Batasuna could run for election in May.

"It has allowed ETA to return to the democratic institutions of our country," Mariano Rajoy said in comments at a rally in Seville.

During the Basque conflict, ETA has killed more than 800 people in its campaign for Basque independence. The government scrapped peace talks with ETA in December, when the armed group bombed Madrid airport, killing two people in its first fatal attack since May 2003.

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