By Tina Bellon and David Shepardson

(Reuters) - The U.S. auto safety regulator on Thursday said it was closely watching Tesla Inc's <TSLA.O> release of a software version intended to allow its cars to drive themselves, saying it stood ready to protect the public against safety risks.

Tesla on Tuesday night released a beta, or test version, of what it calls a "Full Self Driving" software upgrade to an undisclosed number of "expert, careful" drivers. The release prompted online posts by excited recipients who shared video snippets of their car driving supposedly autonomously on city streets at night.

During a Tesla earnings call on Wednesday, Chief Executive Elon Musk said the latest upgrade was planned to be widely released by the end of this year, with the system becoming more robust as it collected more data.

"NHTSA has been briefed on Tesla’s new feature, which represents an expansion of its existing driver assistance system. The agency will monitor the new technology closely and will not hesitate to take action to protect (the) public against unreasonable risks to safety," the National Highway Traffic Safety Administration said in a statement.

NHTSA in July said its special crash investigation team had "looked into 19 crashes involving Tesla vehicles where it was believed some form of advanced driver assistance system was engaged at the time of the incident."

Musk for years has promised self-driving for the company's vehicles but missed several self-imposed deadlines.

Researchers, regulators and insurance groups say true self-driving is still years away and more complex than companies anticipated several years ago. They have criticized Tesla's promotion of its existing semi-automated Autopilot system as dangerously misleading.

A consortium of self-driving technology companies, Partners for Automated Vehicle Education (PAVE), which includes Ford Motor Co <F.N>, General Motors <GM.N> and Google's <GOOGL.O> self-driving unit Waymo, criticized Tesla's approach.

"Public road testing is a serious responsibility and using untrained consumers to validate beta-level software on public roads is dangerous and inconsistent with existing guidance and industry norms," PAVE said in a Thursday statement.

Autopilot and similar advanced driver assistance systems can provide steering, braking and acceleration support under limited circumstances, generally on highways.

Tesla's website describes the new software release as "Autosteer on City Streets," saying the system requires active driver supervision and does not make the car autonomous. https://www.tesla.com/support/autopilot

Tesla owners can purchase "Full Self Driving" for $8,000 in hopes of eventually receiving the upgrade, with the price increasing by $2,000 on Monday, Musk said on Thursday.

On Twitter, Tesla owners receiving the test version posted videos of their experience, claiming the car "literally sees everything," setting indicators on its own and navigating turns even without clear lane markings. https://bit.ly/3kpgvUu

They also posted a picture of the software update release notes, which said the system "may do the wrong thing at the worst time," urging drivers to keep their hands on the wheel and pay extra attention.

Reuters could not reach Tesla for comment on NHTSA's statement and to confirm the authenticity of the release note.

(Reporting by Tina Bellon in New York and David Shepardson in Washington; Editing by Jonathan Oatis and Steve Orlofsky)