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* NATO chief warns defence cuts could endanger alliance's power
* West must not neglect security during economic crisis, he says (Updates with press conference, report issued)
By Adrian Croft
Anders Fogh Rasmussen also sounded the alarm about growing disparities between what the United States and Europe spend on defence and warned that NATO's military power and global influence could be put at risk if allies continue to slash their defence budgets while emerging powers boost theirs.
France's intervention in Mali has illustrated his point by again exposing European military deficiencies that were laid bare during the 2011 Libya campaign when European states relied heavily on the United States for air-to-air refuelling, intelligence and surveillance.
Rasmussen praised France for taking "swift and effective action" in Mali. Paris intervened militarily in Mali in early January to halt the advance of al Qaeda-affiliated militants who launched an offensive that threatened the Malian capital Bamako.
While NATO is not involved in Mali, some European members of the alliance as well as the United States and Canada have supported France with transport aircraft and other help.
"The operation also illustrates that European allies still need strong support from the United States in their endeavours to carry out such an operation," Rasmussen told a news conference.
"The Mali operation once again points to the need for increased European efforts to fill the gaps when it comes to essential military capabilities such as intelligence, surveillance and reconnaissance," he said.
The United States agreed to a French request to fly tankers to refuel French jet fighters and bombers attacking the militants. The United States is also sharing intelligence and helped to transport some French troops.
The United States, shifting its security focus increasingly to Asia, wants the Europeans to take the lead in military operations in its neighbourhood, such as in Libya and Mali.
Releasing his annual report, Rasmussen voiced concern that defence cuts by Western states trying to rein in budget deficits because of the financial crisis risked weakening their security.
"Of course, governments must reduce deficits and borrowing," he said. "You can't be safe if you're broke. But ... we have to invest to keep our societies safe. Because security threats won't go away while we focus on fixing our economies."
Rasmussen warned that defence spending among the NATO allies is increasingly uneven, not just between North America and Europe, but also among European allies.
This could lead to a growing capability gap that could limit the allies' ability to work together and risk weakening political support for NATO in the United States. At the same time, emerging powers were spending more on defence.
"The rise of emerging powers could create a growing gap between their capacity to act and exert influence on the international stage and our ability to do so," Rasmussen wrote in the annual report.
He did not name any countries but China boosted military spending by 11 percent last year, continuing a near-unbroken string of double-digit rises across two decades.
Rasmussen also warned that too deep defence cuts could worsen the West's economic crisis by weakening defence industries that are key drivers of innovation, jobs and exports. (Editing by Rosalind Russell)