DUBAI - State-controlled Dubai World is discussing a new date with banks for $3.5 billion in debt falling due on Dec. 14, but with no deal yet announced, spooked investors sold Dubai shares down to 21-week lows.

Dubai World met its main creditors on Monday to discuss its request to delay repayment of $26 billion, which has shaken global markets and confidence in the Gulf business hub.

The talks aim at finding a final solution and how to reschedule the debt due ... The matter at hand now is a date of the debt maturing this month, al-Bayan newspaper reported, citing unidentified sources.

London-listed Standard Chartered, HSBC, Lloyds and Royal Bank of Scotland, along with local lenders Emirates NBD ENBD.DU and Abu Dhabi Commercial Bank ADCB.AD are on the creditors panel.

The Dubai stock market index .DFMGI, down 6.4 percent at 0820 GMT, hit a 21-week low amid renewed selling pressure.

The bourse has fallen 21 percent in the five trading sessions since Dubai World stunned global markets by asking for a debt standstill as it tries to renegotiate a multi-billon dollar debt mountain.

You can usually take the view that no news is good news, but in Dubai's case it's quite the opposite -- investors need to hear some developments on Dubai World's restructuring, said Julian Bruce, EFG-Hermes director of institutional equity sales.

The UAE central bank told local banks to report any exposure to Dubai World in a circular dated Dec. 6, bankers said on Monday.

Dubai's finance chief said on Monday that while Dubai World might sell some assets to finance its commitments, the government, which borrowed to transform the emirate from a desert backwater into a major trading and tourism centre, would not make any disposals of its own.

He said Dubai's government and Dubai World were not the same, suggesting the emirate's most valuable firms, such as Emirates airline, Dubai Aluminium (DUBAL) or its 21 percent London Stock Exchange stake would not be involved in a firesale.

Dubai's debt rescheduling plans could go beyond the recently announced Dubai World standstill, extending to about $47 billion on the back of further restructuring needs of government-related entities, Morgan Stanley said in note on Tuesday. (Additional reporting by Inal Ersan and Rachna Uppal; Writing by John Irish, editing by Will Waterman)

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