BEIRUT - Lebanon won't be able to deliver many if any reforms sought by the IMF as conditions for a funding deal before an election in May, two lawmakers said, meaning months could go by without action as that vote may well be followed by political limbo.

The IMF announced the draft funding deal on Thursday, but said its board would not decide on whether to approve it until Beirut enacts a batch of reforms including measures which ruling factions have long failed to deliver.

An IMF agreement is widely seen as the only way for Lebanon to start emerging from what the World Bank has described as one of the world's worst ever financial collapses - and the deepest crisis since Lebanon's 1975-90 civil war.

Many analysts have expressed renewed doubt that Lebanon's fractious parties can deliver reforms they have long been unwilling or unable to agree to, even as Lebanese leaders have hailed the IMF deal and vowed to make it succeed.

The parliamentary election is seen as another complicating factor. After the vote, a new government must be formed, a process that usually takes many months during which the outgoing cabinet acts as caretaker and cannot take major decisions.

Nicolas Nahhas, a lawmaker and adviser to Prime Minister Najib Mikati, noted there were only a few weeks left before the election and MPs were busy campaigning.

"This wasn’t meant to be done in a few weeks and nobody serious would say it should be done in that time frame," he said of the reforms.

"The agreement is a kind of benchmark of what should come after elections. So, after elections, parliament will start studying quickly these actions and then we shall see how we go forward."

Parliament could possibly approve a capital control law and budget law before the vote, said Nahhas and a second lawmaker, Yassin Jaber of parliamentary speaker Nabih Berri's Amal Movement.

But the government hadn't worked on the rest of the list, Jaber said. "They have to do their homework, send it to parliament, and I don't think time is going to allow that," he said.

"The big dilemma is what will happen on May 16 ... If you end up with a vacuum, you have a problem."

Before the agreement goes to the IMF board, the Fund said Lebanon had agreed to complete measures including cabinet approval of a bank restructuring that recognises and addresses large losses in the sector, while protecting small depositors and limiting their recourse to public resources.

Lebanon's political and financial elite have been at odds over such a plan for two years, particularly the issue of how to distribute some $70 billion of losses between banks, the state, and depositors.

The governor of Lebanon's central bank (BDL) Riad Salameh told Reuters he hoped the IMF terms would be met, that the central bank had "cooperated and facilitated" the IMF mission and that the deal would "contribute to the unification of the exchange rate."

Lebanon's banks association welcomed the deal but said it had not received details of the government's plan to allocate financial sector losses and "would expect the plan to include a fair allocation of the loss on the government/BDL given the hierarchy of responsibilities."

Banks have long said the government and central bank should bear the lion's share of losses.

The IMF called for "limiting recourse to public resources," in its Thursday statement announcing the draft agreement.

STATE COLLAPSE

Goldman Sachs said the reforms were challenging, "but none more so in our view than the restructuring of the local banks".

"The distribution of losses between the government, bank shareholders and depositors is a politically challenging question and is unlikely to be resolved easily (or quickly), in our view," it said.

The deal was a "significant step forwards", but more of a carrot "than a promise of near-term financial assistance".

Mike Azar, an expert on the crisis, said the deal lacked detail and would be sold to voters as a "victory when in reality it’s a non-binding statement of intentions accompanied by nothing tangible".

"It is unfortunate that the IMF agreed to hand the government a hollow victory just ahead of elections."

Donors want Beirut to address root causes of the crisis - state waste and corruption - before releasing aid.

The United States welcomed the deal and urged reforms.

France called it "an important first step".

The ambassadors of Kuwait and Saudi Arabia, once a major donor to Lebanon, both returned to Beirut, marking a thaw in ties strained by the Iran-backed Hezbollah's influence in Beirut.

Speaking after meeting with President Michel Aoun, Maronite Patriarch Bechara Boutros Al-Rai linked the IMF deal to the return of the Gulf envoys. "This all feeds into the same place because they always said they would stand with Lebanon," he said.

Andrew Tabler, a fellow at the Washington Institute for Near East Policy, said the developments reflected the same thing: "Concern about a Lebanese state collapse is increasing in the West and in the region."

"I am sceptical (Lebanese politicians) will take the hard choices. They usually don't."

(Additional reporting by Tom Perry and Enas Alshray; Writing by Tom Perry; Editing by Hugh Lawson)