Britain's FTSE set for best month in nearly a year

* FTSE 100 down 0.4 pct

* BT falls after it puts finances in order

* FTSE underperforms euro zone in January after ECB scheme

* Precious metals miners rally with gold

By Alistair Smout

LONDON, Jan 30 (Reuters) - Britain's top share index looked set to post its strongest monthly performance in almost a year on Friday, consolidating near four-month highs, although a fall in BT put pressure on the market despite a recovery in mining shares.

BT dropped 2.3 percent after saying it had agreed to pay down its ballooning pension deficit and signed off on an upgrade of its fibre network.

Traders said the steps to put its finances in order ahead of a key football rights auction and a deal to buy mobile network EE were needed but would weigh on the stock in the short term.

"BT have a lot of bills coming their way, plus the next round of bidding for football services. Having made their bed with regards to providing a certain standard of service and coverage, they'll have to lie in it, and that won't be cheap," IG (LSE: IGG.L - news) market analyst Alastair McCaig said.

"The acquisition of EE is also being worked through the books. The pension deficit is also there, so there's a sizeable range of bills which are all fairly meaty."

The FTSE 100 index edged 26.40 points lower, down 0.4 percent, at 6,784.20 by 0917 GMT, although it remains 3.3 percent higher in January -- its strongest monthly performance since February 2014.

Appetite for equities has been boosted by the European Central Bank's decision last week to launch a sovereign bond-buying programme.

That move helped the market withstand volatility from a shock decision by the Swiss National Bank to scrap its cap on the franc, and Greek elections that have put the new government at odds with its international lenders.

The FTSE 100 has underperformed a 7.5 percent gain for the euro zone blue chip Euro STOXX 50 this month, however, with ECB action spurring the region's stocks to their best monthly gain since 2011.

With gold also set to post its best month in nearly a year, precious metals miners Fresnillo (Other OTC: FNLPF - news) and Randgold Resources were among the FTSE's top gainers, up over 2 percent.

Dixons Carphone (LSE: DC.L - news) also rose over 2 percent after Exane BNP Paribas (Xetra: 887771 - news) raised its target price on the stock and rated it "outperform". (Editing by Catherine Evans)