By Paolo Biondi

ROME (Reuters) - One of the politicians behind an Italian law blamed for deterring ship's captains from rescuing migrant boats said Europe should focus on building economic ties with Africa to stem a growing crisis that has killed hundreds this month.

Umberto Bossi, the founder and former head of the regionalist, anti-immigration Northern League party, defended the law which bears his name which makes it an offence to offer aid to illegal immigrants.

"There's no such thing as a state without borders, we can't get rid of our borders," he told Reuters on Thursday.

The so-called Bossi-Fini law was passed in 2002, when Silvio Berlusconi was prime minister of a centre-right government determined to crack down on illegal immigration, which it said was threatening local jobs.

But it has come under increasing fire this month following the deaths of as many as 550 African migrants in two separate disasters, with Prime Minister Enrico Letta adding his voice to calls for the law to be scrapped.

Several survivors have said they were spotted in distress by fishing boats that did nothing to help, apparently out of concern that they could be penalised under the law.

The issue has caused tension in Letta's unwieldy coalition of left and right, with Bossi's former allies in Berlusconi's centre-right party insisting the law must remain on the statute books.

Bossi denied that the law, passed when he was minister for reforms, was responsible for migrant boats being left without assistance at sea but he said any lasting solution had to start with closer economic integration with Africa.

"We need an accord between our economy and the African economies which have raw materials," he said, pointing to the example of textile manufacturers working with cotton producers in the Ivory Coast.

"A lot of companies could do the first phase of treatment there and then the second and third phases here," he said.

"We can't be giving handouts, we have to set up solid economic relationships," he said.

The League, now in opposition and fiercely critical of the Letta government's handling of the crisis, began life as a pro-devolutionary party in the rich northern regions of Italy but it has always had a strong anti-immigration streak.

Most recently a number of party members have been accused of racism over grossly insulting attacks on Integration Minister Cecile Kyenge, Italy's first black minister, who was born in the Democratic Republic of the Congo.

Bossi was forced from party leadership post last year after a financial scandal but remains in parliament and now holds the title of federal party president.

(Writing by James Mackenzie; Editing by Alison Williams)