Euro zone shares set for biggest weekly fall this year with Greece in focus

* Euro STOXX 50 steady but set for biggest weekly drop since Dec

* Sunday's Greek referendum on bailout a major focus

* PMI surveys confirm continued private sector growth in euro zone

* Banks under the spotlight after more regulatory issues emerge

By Alistair Smout and Liisa Tuhkanen

LONDON, July 3 (Reuters) - A top euro zone share index was set for its biggest weekly fall this year on Friday, with focus on a crucial vote in Greece over its debt negotiations at the weekend.

The euro zone Euro STOXX 50 was on track for its worst week since December, down 4.2 percent since last Friday's close, and flat on the day at 3,463.57.

The FTSEurofirst 300 was also steady at 1,527.32 points by 0801 GMT, down 3 percent for the week and set for its biggest weekly fall since late April.

The market has been hit by concern over mounting tensions between Greece and its international creditors since the government in Athens announced a surprise referendum over its bailout programme.

Set to take place on Sunday, the two campaigns are finely balanced, with the Yes campaign in favour of the bailout taking a slight lead in the latest poll.

"The renewed focus on Greece and the uncertainty about the implications of an exit have once again become a dominant driver in the market," Peter Oppenheimer, Chief Global Strategist at Goldman Sachs (NYSE: GS-PB - news) , said in a note.

"The worst-case downside in the equity market in Europe on a 'No' vote is a move to around 3150 on SX5E (around 10 percent)."

Italian blue chips outperformed, up 0.2 percent after PMI survey data beat expectations. French, German and euro zone PMI readings also confirmed private sector growth.

Banks were in the spotlight, with Royal Bank of Scotland (LSE: RBS.L - news) down 1.5 percent, a top faller after news that the state-backed British bank may need to pay $13 billion to settle claims it misled investors in mortgage-backed securities, according to documents filed in a U.S. court.

Fifteen of the world's largest banks are under investigation on suspicion of rigging the Brazilian currency, antitrust watchdog Cade said on Thursday, the first such probe in one of the busiest foreign exchange markets globally.

"Obviously there are number of other investigations still ongoing... but certainly it won't be a positive addition to sentiment on the sector," Richard Hunter, head of equities at Hargreaves Lansdown (LSE: HL.L - news) , said.

Fiat Chrysler Automobiles NV dropped 1 percent after a senior executive with the automaker said it has fallen short on the execution of auto safety recalls. A U.S. regulator said Fiat Chrysler could face action on its performance as soon as this month.

Europe bourses in 2015: http://link.reuters.com/pap87v

Asset performance in 2015: http://link.reuters.com/gap87v

Today's European research round-up