FRANKFURT (Reuters) - Germany's Federal Office for Motor Vehicles (KBA) would not have approved the autopilot system installed on Tesla <TSLA.O> cars if the technology was still in a beta-phase version, it told German newspaper Welt am Sonntag.

Tesla's partial self-driving Autopilot feature has been thrust under the microscope since a fatal crash involving a Tesla Model S sedan in the United States in May.

European approval for the autopilot system was gained in the Netherlands, but the view of KBA is significant because Germany is Europe's biggest car market.

"If the word beta-phase means an incomplete status of the software, the KBA would not authorize (such) a functionality," the newspaper quoted the KBA as saying.

A beta version generally describes a product that has moved from mere functional readiness but still requires improvements for full usability.

Tesla said on Friday that it is cooperating with the KBA, which reports to the Transport Ministry, to review components. The Berlin ministry, for its part, said it was "clarifying technical issues" with Tesla but denied it was investigating the company for not sufficiently informing authorities, as Der Spiegel magazine reported on Saturday.

(Reporting by Vera Eckert; Editing by David Goodman)