Britain's FTSE rallies as EU membership 'Remain' camp regains ground

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* FTSE 100 up 2 pct

* Opinion polls indicate 'Remain' camp narrowly ahead

* Banks, housebuilders rally

* Circassia Pharmaceuticals drops on failed drug

By Kit Rees

LONDON, June 20 (Reuters) - UK shares paced by banks and housebuilding rose on Monday, boosted by polls suggesting the campaign for Britain to remain in the European Union was regaining a narrow edge over the "Out" camp.

Britain's blue chip FTSE 100 index rose 2 percent to 6,138.78 points by 0809 GMT, extending Friday's 1.2 percent gain.

Two opinion polls published on Saturday showed that the campaign to keep Britain in the European Union ahead of its June 23 referendum had regained its lead, while a third poll also showed momentum for an "In" vote.

The overall picture, however, remains one of an evenly split electorate.

"The risk-off mood of last week which was fading on Friday has turned decisively this morning and ... this (could) extend into the rest of the week provided that the polls continue to point towards 'Remain'," Chris Beauchamp, senior market analyst at IG (LSE: IGG.L - news) , said.

Shares (Berlin: DI6.BE - news) in domestically-focused companies, seen as sensitive to the outcome of Britain's June 23 referendum on its EU membership, rallied, with banks Royal Bank of Scotland (LSE: RBS.L - news) , Lloyds and Barclays (LSE: BARC.L - news) all jumping between 4.6 percent and 6.8 percent.

Housebuilders Taylor Wimpey, Barratt Developments (LSE: BDEV.L - news) , Berkeley Group and Persimmon (Other OTC: PSMMY - news) also rose, gaining between 4.3 percent to over 6 percent.

Precious metals miners Rangold Resources and Fresnillo (Other OTC: FNLPF - news) were the only fallers on the blue chip index, down 2.6 and 0.8 percent respectively as investors dumped perceived safe-haven assets and the price of gold fell.

Among the mid-caps, however, Circassia Pharmaceuticals plunged over 65 percent after a cat allergy treatment failed in a late-stage trial due to a marked placebo effect.

(Reporting by Kit Rees; Editing by Mark Heinrich)