*

Panama port deal won't be signed next week, but talks under way, sources say

*

China's State Administration for Market Regulation to review the deal

*

Negotiation with BlackRock ( BLK )-led consortium is on 145-day exclusive basis

*

Beijing trying to project strong stance against US, analysts say

(Adds State Department, analyst comment in paragraphs 12, 17)

By Clare Jim, Rishav Chatterjee and Davide Barbuscia

March 28 (Reuters) -

Hong Kong's CK Hutchison ( CKHUF ) will not sign a deal next week to sell its two port operations near the Panama Canal to a BlackRock ( BLK )-led group, two people with direct knowledge of the matter said, as pressure mounted from Beijing.

China's market regulator said it will carry out an antitrust review on the Panama port deal in accordance with a law to protect fair competition and safeguard the public interest, its official WeChat account showed late on Friday.

The telecoms-to-retail conglomerate owned by tycoon Li Ka-shing this month agreed to sell most of the global $22.8 billion ports business, including assets it holds along the strategically important Panama Canal, to a group led by BlackRock ( BLK ).

Definitive documentation for the two port operations near the Panama Canal was expected to be signed by April 2, according to the sale announcement made on March 4.

One of the people, who declined to be identified due to the sensitivity of the matter, did not elaborate, saying only that the definite documentation would not be signed due to "obvious reasons".

The person added the development does not mean the deal has been called off, and April 2 is not a hard deadline. The second source, who also declined to be identified for similar reasons, said talks are still very much underway.

Negotiation for the overall deal that covers a total of 43 ports in 23 countries is on an exclusive basis between CK Hutchison ( CKHUF ) and the consortium for 145 days.

Local media including Singtao Daily and The South China Morning Post first reported the news.

CK Hutchison ( CKHUF ) did not immediately respond to a Reuters request for comment.

The conglomerate has been caught in China's crosshairs in the highly politicized deal which is expected to garner the firm more than $19 billion in cash.

Chinese authorities have reacted negatively to plans by the conglomerate to sell its ports assets, while the deal was hailed by U.S. President Donald Trump who said he wants to retake control of the strategic waterway.

"We are aware of the comments made by China," U.S. State Department spokesperson Tammy Bruce told a news briefing on Friday when asked about the Chinese regulator's review. "It's also no surprise that the CCP (Chinese Communist Party) is upset at this acquisition, which will reduce their control over the Panama Canal area."

Over the past two weeks, pro-Beijing Hong Kong newspaper Ta Kung Pao has published a series of commentaries criticizing the deal, depicting it as a betrayal of China.

China's Hong Kong and Macau Affairs Office reposted some of the commentaries on its website, fueling speculation Beijing could try to scupper the sale.

A CK Hutchison ( CKHUF ) unit operates two of the five ports adjacent to the Panama Canal, which manages about 3% of the global sea-borne trade. Panama first awarded the concession to the company in 1998 to run the ports and extended it for another 25 years in 2021.

Panama's Comptroller General told reporters this week an audit of the concessions would be ready in coming "days or weeks."

Beijing's criticism of CK Hutchison's ( CKHUF ) move to sell its ports business is a precursor to heightened political scrutiny of major Chinese business divestments involving American buyers, analysts have said.

Bloomberg News, earlier in the week, reported that Chinese authorities had told state-owned firms to hold off on any new deals with businesses linked to tycoon Li and his family.

(Reporting by Clare Jim in Hong Kong, Rishav Chatterjee and Roshan Thomas in Bengaluru, Davide Barbuscia in New York, Michael Martina in Washington and Elida Moreno in Panama City; Editing by Savio D'Souza, Shinjini Ganguli, David Evans, Nick Zieminski and David Gregorio)