UNITED NATIONS, April 30 (Reuters) - The Iraqi government should spend more of its budget on basic services such as education and clean water to help children who are facing an "intolerable" situation, a U.N. official said on Wednesday.

Radhika Coomaraswamy, special representative of the U.N. secretary-general for children and armed conflict, was reporting on a visit this month to Iraq, where she said she met U.S. and Iraqi officials as well as refugees.

"The situation is quite intolerable for children," she told a news conference at U.N. headquarters.

She said the percentage of children attending school had fallen from around 80 percent in 2005 to just 53 percent now. Some 60 percent have no access to safe drinking water and cholera is a serious concern in areas of conflict, she added.

"We feel that the government of Iraq must use a large portion of its budget, that is the surplus, to deal with the provision of these basic services to its population," she said, adding that there was a surplus that was not being spent.

"It is dealing with reconstruction, large scale reconstruction infrastructure projects ... (but) there's just no attention to these basic services, and if there is, there's a sectarian emphasis," she said.

Iraq's ambassador to the United Nations said earlier this week the government planned to issue a $5 billion supplementary budget in June as a result of higher revenues due to the rising price of oil, the source of most of the country's revenue.

Coomaraswamy said many children under the age of 18 were in detention in Iraq, many in overcrowded facilities and without access to proper legal representation.

"There are a total of 1,500 children in detention, the youngest as young as 10 years old," Coomaraswamy said, adding that of those, 500 were in U.S. military detention and the rest in Iraqi custody.

Coomaraswamy also said there was anecdotal evidence children were being recruited by militias and insurgent groups, in some cases being paid to plant bombs. (Reporting by Claudia Parsons; Editing by Eric Beech)

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