By Tsvetelia Ilieva and Justyna Pawlak

SOFIA, May 21 (Reuters) - Bulgaria's fight against corruption and organised crime cannot be rushed, but there will be indictments against people in power by the end of the year, chief prosecutor Boris Velchev said on Monday.

Calling for patience on the part of a restive European Union, which is threatening sanctions if progress is too slow, and from frustrated Bulgarians, Velchev said prosecutors and politicians were among those his office is investigating.

"Speed is not the most important thing," he told Reuters in an interview. "This office is trying to do a good job. It would be faster if we lived in a totalitarian state but we have to protect human rights."

Bulgaria, which joined the EU in January after a last-minute flurry of reforms, faces sanctions if a June 27 progress report fails to convince Brussels it is serious about fighting widespread abuse.

Voters angry at persistent crime and poverty punished the ruling coalition in elections to the European Parliament on Sunday, handing victory to the new rightist opposition GERB party, which promised to fight corruption and help business.

The ruling coalition won about 48 percent of the vote, far below the two thirds it got in the 2005 national polls.

EU SANCTIONS UNLIKELY

Velchev said EU sanctions were unlikely, and if imposed, could hamper efforts to crack down on crime gangs and corrupt officials who help them control large swathes of the economy.

"I do not believe that (EU) safeguard clauses will be imposed," he said. "Bulgaria has a problem with a lack of experience. I wonder if we limit international cooperation ... would that make it any better here?"

Sofia is under pressure to show that it is cracking down on corrupt senior government officials and perpetrators of the frequent gangland killings.

If Brussels decides Sofia is dragging its heels, it may refuse to recognise Bulgarian court decisions and cut its hefty financial aid.

Analysts say a corruption scandal involving powerful Economy and Energy Minister Rumen Ovcharov will become a litmus test of the government's willingness to root out crime.

Ovcharov was forced to take leave earlier this month when prosecutors launched an investigation into allegations of corruption and blackmail.

"We are planning to announce the results of our inquiry at the beginning of June," Velchev said. "We want the public to know we have not hidden anything, but we are not going to accuse anybody ... on the basis of their reputation without evidence."

Velchev said his office was investigating some "top people" but declined to give details. "Before the end of the year, we will see indictments of people in power, magistrates, administrators, politicians."

Asked about concrete results from his battle against crime, he said: "We have eight proceedings open against prosecutors. This has never happened before ... Why do you think everything has to be against the top level?"

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