  Competing models for broad spectral features in the soft X-ray spectrum of
the Seyfert I galaxy Mrk766 are tested against data from a 130 ks XMM-Newton
observation. A model including relativistically broadened Ly-alpha emission
lines of OVIII, NVII and CVI is a better fit to 0.3-2 keV XMM RGS data than a
dusty warm absorber. Moreover, the measured depth of neutral iron absorption
lines in the spectrum is inconsistent with the magnitude of the iron edge
required to produce the continuum break at 17-18Angstroms in the dusty warm
absorber model. The relativistic emission line model can reproduce the
broad-band (0.1-12 keV) XMM-EPIC data with the addition of a fourth line to
represent emission from ionized iron at 6.7 keV and an excess due to reflection
at energies above the iron line. The profile of the 6.7 keV iron line is
consistent with that measured for the low energy lines. There is evidence in
the RGS data at the 3sigma level for spectral features that vary with source
flux. The covering fraction of warm absorber gas is estimated to be ~12%. Iron
in the warm absorber is found to be overabundant with respect to CNO compared
to solar values.
