WASHINGTON (Reuters) - Republican Senator Mike Johanns on Wednesday announced his opposition to the nomination of Peter Diamond to a seat on the Federal Reserve Board, citing "an alarming lack of concern over our spending and fiscal realities."

The decision by Johanns, who twice backed the Nobel laureate in votes in the Senate Banking Committee last year, underscored the uphill struggle Diamond faces winning confirmation from the Senate.

The Senate Banking Committee last year approved Diamond's nomination twice but Sen. Richard Shelby, the panel's top Republican, moved to block the nomination and it never came up for a vote in the full Senate.

President Barack Obama renominated Diamond earlier this year and the banking panel intends to vote on the nomination on Thursday. Johanns is the only Republican on the committee this year who had voted in favor of Diamond in 2010, and Capitol Hill aides expect a straight party-line vote this time.

"With our country spending its way into a crisis, I can no longer support a nominee so vocally in favor of more spending, more stimulus, and more quantitative easing," the Nebraska Republican said in a statement.

"We must be increasingly wary of the threat of inflation, yet the Fed continues to print money with reckless abandon."

Diamond said at a confirmation hearing earlier this year that the Fed's $600 billion bond-buying program has been an effective tool and played down concerns about inflation.

"The issue is, going forward, are there signs that inflation might be picking up quickly?" he said in response to questions from lawmakers. "I view commodity prices as driven by micro factors, not general stimulation of the economy."

It will take a willful exercise of political muscle from the White House and Senate Democratic leadership to push Diamond's nomination through a legislative chamber in which a single member can hold up a nomination.

Senate Majority Leader Harry Reid could decide to overcome Shelby's roadblock by mustering a 60 vote super-majority, but he would have to gain some Republican support and devote precious legislative time and political capital to doing so.

The Democrats control the Senate by a 53-47 margin.

The Fed's normally seven-member board has two vacancies. Obama has yet to announce his choice for the other seat.

(Reporting by Mark Felsenthal; Editing by James Dalgleish)