BERLIN, Feb 11 (Reuters) - Iraqi Prime Minister Haider al-Abadi urged the country's autonomous Kurdistan region not to go ahead with a proposed referendum on independence, saying it would be neither in its own interest nor Iraq's.

Kurdish leader Massoud Barzani said last week the time had come for the region to hold a non-binding referendum on independence from the rest of Iraq, despite being in the throes of political, economic and security crises.

"I urge them not to go ahead with the referendum," Abadi said at a news conference in Berlin on Thursday. "If as they say they are not going to abide by its outcome, then why hold a referendum"

The chaos created by Islamic State's occupation of swathes of Iraq and Syria since in 2014 has given Iraq's Kurds a chance to further their long-held dream of independence.

The region's peshmerga forces have driven back the hardline Sunni Muslim militants in northern Iraq, earning them international recognition. But the Kurds are currently struggling to avert an economic collapse brought on by a global slump in oil prices.

"Kurdistan is part of Iraq and I hope it remains that way," he said after meeting with German Chancellor Angela Merkel. "Disintegration is in no-one's interest."

In recent years Iraq's Kurds have sought to maximize their autonomy, building their own pipeline to Turkey and exporting oil independently as relations with the federal government in Baghdad frayed over power- and revenue-sharing.

Regional powers have historically opposed Kurdish aspirations for independence, especially Syria, Turkey and Iran - neighboring states with large Kurdish minorities of their own. The United States also wants the Kurds to remain part of Iraq.

Merkel said on Thursday she did not want to see Iraq's integrity undermined either: "With all our support for the peshmerga and the Kurds (in the fight against Islamic State) we have always made that clear".

Some view calls for independence as an attempt to divert attention from internal issues and rally Kurds behind Barzani, who remains president months after his mandate expired in August.

"I urge Kurdish leaders to reconcile their people to this fact that the Kurdistan region will not progress without Iraq," Abadi said.

(Reporting by Madeline Chambers in Berlin and Isabel Coles in Erbil) ((isabel.coles@thomsonreuters.com; +964 790 191 7024; Reuters Messaging: isabel.coles.reuters.com@reuters.net))

Keywords: MIDEAST CRISIS/IRAQ KURDS