* Cutting red tape part of campaign to keep UK in the EU
* EU pilloried for rules from hairdressing to bottled water
By Robin Emmott
BRUSSELS, Oct 25 (Reuters) - British Prime Minister DavidCameron pressed European leaders on Friday to scrap red tapethat London says is strangling small companies, but won fromthem only a vague commitment to lighten regulation.
Armed with a 60-page report and accompanied by prominentbusiness leaders, Cameron set out to tackle the grievances ofBritish Eurosceptics who complain the bloc's rules are petty,pernicious and overbearing.
"I've brought some of the best business brains in Britainhere to Brussels to talk about the regulation we can cut,"Cameron said as he arrived at the second day of the EU summit.
In the marble summit building in Brussels, Cameron soughtsupport from German Chancellor Angela Merkel and other EUleaders during a meeting that included the head of the EuropeanCommission, Jose Manuel Barroso.
The chief executive of Marks & Spencer, one ofBritain's best-known shopping chains, was also present.
Cutting regulation is at the heart of Cameron's campaign toconvince British voters that remaining in the 28-nation bloc of500 million people is in Britain's interest before a promisedreferendum on its continued membership.
Cameron has promised a referendum if he is re-elected in2015, but Britain's allies such as free-trade advocates Germanyand the Netherlands are loathe to see London leave.
In their final summit statement, EU leaders will promise tosupport the Commission in its efforts to scale back unnecessarylaws under a programme dubbed "REFIT" in Brussels.
Leaders will welcome "the steps taken by the member statesand the EU aimed at better identification of excessivelyburdensome regulation," the summit statement will say, accordingto a draft copy seen by Reuters.
"Substantial efforts are required in this respect, both atEU and national levels," it will say.
The global financial crisis and the euro zone's debttroubles have badly damaged trust in the European Union whilemistrust of EU lawmaking has grown as the European Commission,the EU executive, takes on more power to coordinate a club thathas expanded across Eastern Europe over the past decade.
Critics have pilloried the Commission for rules such as onepreventing drinkmakers from claiming that water can treatdehydration. Brussels has had to drop plans to force restaurantsto serve olive oil in sealed bottles instead of dipping bowls.
Cameron's report on red tape, compiled by business leadersand chaired by Business Minister Michael Fallon, said there weretoo many "pointless, burdensome and costly regulations".
It makes more than 30 recommendations, in areas fromenvironmental safeguards to paid maternity leave. For instance,dropping an EU rule that requires firms to keep health andsafety records could save 2.7 billion euros ($3.67 billion), itsaid.
The Commission said this month it will review EU laws and becareful when writing new ones, marking a change of tone at thebody that proposes laws for the bloc's members.
Barroso has said the Commission has cut the cost ofadministrative burdens by 32.3 billion euros over the last fiveyears and scrapped 5,590 legal acts.
But with the Commission responsible for regulating acrossall areas of European industry and in the process of overhaulingthe continent's financial architecture, there is little prospectof a huge reduction in the number of EU laws.
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