Goldman Sachs Group Inc chief Lloyd Blankfein will be called to testify at Raj Rajaratnam's insider trading trial as soon as this week, but prosecutors want to prevent him being questioned about any legal issues facing the bank, according to trial documents.

The appearance of Goldman's chief executive officer on the witness stand could overshadow the Manhattan federal court trial of the one-time hedge fund billionaire. Rajaratnam's lawyers hope to use the opportunity to ask Blankfein about probes stemming from the 2008 financial crisis or any embarrassing issues surrounding Goldman that could damage his credibility.

The government has signaled its intention to call Lloyd Blankfein as a witness as early as this week, Rajaratnam's lawyers wrote in a letter, dated Sunday and obtained by Reuters on Tuesday.

A Goldman Sachs representative was not immediately available to comment.

Prosecutors hope to ask Blankfein about a former board member who has been charged by regulators with leaking inside information about Goldman. Goldman has not been charged with wrongdoing.

Galleon Group founder Rajaratnam, 53, has been on trial in Manhattan federal court since March 8 in the biggest Wall Street insider trading trial in decades.

U.S. prosecutors have said they intend to play FBI phone taps of former Goldman director Rajat Gupta tipping Rajaratnam about Warren Buffett's Berkshire Hathaway investing $5 billion in Goldman, before the investment became public, at the height of the 2008 financial crisis.

Goldman is considered the most powerful Wall Street bank and has many critics who accuse it of arrogance. The investment bank was once described in Rolling Stone magazine as a great vampire squid ... jamming its blood funnel into anything that smells like money.

In the letter to prosecutors, Rajaratnam's lawyers demanded that the government turn over any documents related to open investigations of Goldman by the Department of Justice, the U.S. Securities and Exchange Commission or other federal agency.

But prosecutors want to block such questioning in defense cross-examination, according to trial correspondence.

Goldman Sachs is not on trial in this matter, prosecutors wrote in a separate letter to presiding U.S. District Judge Richard Holwell, dated Monday.

The cross-examination of Mr. Blankfein is simply not the appropriate forum to delve into the highly complex causes of the 2008 financial crisis or the ensuing economic recession, prosecutors said.

Goldman was sued by U.S. securities regulators last April for marketing and selling repackaged mortgage bonds to investors without disclosing key information about the securities. The investment bank agreed in July to pay $550 million to settle the SEC lawsuit.

Prosecutors said they intend to call Blankfein to testify on Gupta's role on the board and his duties of confidentiality. They said the Manhattan U.S. Attorney's office has not notified Mr. Blankfein or Goldman Sachs that either is a target (or, for that matter, a subject) of any pending criminal investigation.

They also said in the letter that they have made no promise that Blankfein or his company would receive anything in exchange for his testimony.

Sri Lankan-born Rajaratnam is accused of making $45 million in illicit profit in trades between 2003 and 2009 based on tips from high-placed executives in corporate America.

He denies the charges and has vowed to clear his name at the trial, which is expected to last about two months.

The case is USA v Raj Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 09-01184.

(Additional reporting by Martha Graybow and Lauren Tara LaCapra; Editing by Gary Hill)

Raj Rajaratnam Lloyd blankfein Warren buffett Goldman sachs