By Michael Georgy and Babak Dehghanpisheh

ERBIL, Iraq (Reuters) - The battle for Mosul will be a make-or-break moment for Iraq that could split the country along ethnic and sectarian lines, said the former regional governor who has assembled a force which will take part in the campaign.

Iraq has been preparing for more than a year for its offensive to drive Islamic State out of its last major stronghold. The operation is expected to kick off this month.

What happens after a victory could present an even bigger challenge than the battle, however -- Sunnis, Kurds and Shi'ites who have formed an uneasy alliance against the militants will be faced with the daunting task of drawing up an effective power-sharing formula in Iraq, a major OPEC oil producer.

"The biggest fear is that Iraq will separate if they don’t control this fight in a wise manner and they don’t give the Arab Sunnis real authority," said Atheel al-Nujaifi, a prominent Sunni politician who was governor in Mosul when Islamic State seized the city.

Mosul fell to Islamic State in June 2014 when Iraqi security forces fled. Islamic State declared a caliphate which straddled territory in Iraq and Syria, with Mosul as its de facto capital.

In August, an Iraqi parliamentary panel blamed Nujaifi and a handful of other politicians and military commanders for the group's lightning capture of the predominantly Sunni city.

Nujaifi told Reuters he is committed to promoting unity in Iraq, which has descended into a sectarian civil war since a U.S.-led invasion toppled Saddam Hussein in 2003.

The politician has patched together a force of about 4,500 fighters, mostly Iraqi soldiers and former officers from Nineveh Province, of which Mosul is the capital, to take part in the offensive.

Trained by 200 Turkish military advisors and U.S. forces, Nujaifi says his men are more likely to succeed in stabilising Mosul because they are locals who can win over the population.

TURKISH-BACKED FORCE

Nujaifi praised cooperation with the Kurds but criticised the Iranian-backed Shi'ite militias, underscoring sensitivities ahead of the Mosul campaign.

Sunnis accuse the militias of widespread human rights abuses against them, which they deny. The militias, who have been a bulwark against Islamic State's advances, say they are protecting Iraq from terrorists.

"Kurds are partners on the ground. We have no problems with them. But in terms of the Shiite militias they are an alien or strange entity in the governorate," Nujaifi said in his spacious villa in the Kurdish city of Erbil.

"In terms of the Kurds there is no problem. But in terms of the Iranian presence this is very dangerous for Nineveh governorate," he said in the interview, as armed men in green military fatigues stood guard.

Underscoring the complexities, Nujaifi's ally Turkey is wary of Iraq's Kurds because it fears their semi-autonomous state in the north will encourage Kurds in Turkey to press for independence.

While Nujaifi called for unity, he suggested calm could only come with more regional autonomy, an idea which angers the central Shi'ite-led government in Baghdad.

Nineveh should handle its own administrative and security affairs, and even write up its own constitution, he said.

Minority Sunnis held many positions of authority under Saddam, but their fortunes declined after the U.S. occupation. Majority Shi'ites now dominate government and military posts.

Nujaifi warned Iraq would split if Sunnis are not empowered.

"Maybe it will be divided into more then three or four sections. Even in Baghdad they will have the same problems," he said.

"The Mosul battle may keep Iraq as one unit but with a new kind of administration or there will be a separation."

A survivor of 15 assassination attempts by Islamic State in Mosul, Nujaifi is a prime example of Iraq's complex dangers.

He said he gets frequent death threats from both the Sunni Islamic State and the Shi'ite militias.

"This is how our life is," he said.

(Writing by Michael Georgy; Editing by Sonya Hepinstall)