Moody's warned Belgium on Friday its credit rating could fall due to the burden of bailing out Dexia , the French-Belgian financial group, and the prospect of higher funding costs and weak economic growth.

The ratings agency said it had placed Belgium's Aa1 government bond ratings, one notch below the top Aaa status, on review for possible downgrade.

Moody's joins Standard & Poor's and Fitch, which have put their AA-plus ratings for Belgium's on negative outlook in the past year. Both said Belgium's lack of a fully fledged government undermined budget efforts in one of the euro zone's most indebted states.

Moody's cited three reasons for its review: materially increased funding costs for sovereigns and banks of countries with high debt, risks to growth of Belgium's open economy, and the weight on public finances of supporting the banking sector.

Dexia is on the verge of being split up by Belgium and France, though a Dexia board meeting to discuss the group's future has been pushed back to Sunday from Saturday. Dexia, whose shares fell 42 percent this week alone, has been struck by both its heavy exposure to Greece and troubles accessing wholesale funding.

Belgium is to pay for the likely nationalization of Dexia's Belgian banking business and its share of guarantees for a bad bank of Dexia assets, including euro zone periphery debt.

In the course of its near-term review of Belgium's rating, Moody's said it will include a close look at the potential for additional government measures to support the banking system, or individual banks.

In this regard, Moody's intends to assess the potential costs and additional contingent liabilities that the government may incur in supporting the Dexia Group, Moody's said.

Belgium has found itself in the middle ground between the core triple-A-rated euro zone countries and those at the periphery of the single currency bloc whose sovereign debt has sold off sharply since the middle of 2010.

It has been without a new government since a parliamentary election in June 2010, and its public sector debt totaled 96.6 percent of annual output last year, putting it behind only Greece and Italy in the euro zone and on a par with bailout recipient Ireland.

The spread between yields on Belgian 10-year bonds and those on equivalent German bunds, a sign of the perceived risk of Belgian debt, pushed to a three-week high of 222 basis points on Wednesday; the spread fell to just below 200 on Friday.

Belgium's caretaker government plans to restrict the 2011 budget deficit to 3.3 percent of gross domestic product, comfortably below the average for the euro zone, and the chances of a new government forming have increased markedly in recent weeks.

Belgium is planning to bring the deficit down to 2.8 percent in 2012.

Belgium's debt agency has also sold 35.4 billion euros ($47.8 billion) of bonds this year, just short of its 36 billion euro target for the whole year, with two further debt auctions scheduled.

Financial markets were already unsettled on Friday after Fitch Ratings cut Italy's sovereign credit rating by one notch and Spain's by two, citing a worsening of the euro zone debt crisis and a risk of fiscal slippage in both countries.

(Additional reporting by Pam Niimi and David Gaffen in New York; Editing by Leslie Adler)