FTSE surrenders early gains as miners slip again

* Blue-chip FTSE 100 flat by midday, miners down

* Domino Printing up 31 pct after Brother Industries' bid

* Cairn Energy (LSE: CNE.L - news) down 19 pct on Indian tax dispute

By Atul Prakash

LONDON, March 11 (Reuters) - Britain's top share index surrendered early gains by midday trading on Wednesday, with miners extending their recent weakness on lingering concerns about the pace of economic growth in China, the world's largest metals consumer.

Investors also became cautious after data showing British industrial output fell in January, hit by a reduction in work in the information technology and machinery sectors after a strong December.

However, shares in mid-cap Domino Printing Sciences (LSE: DNO.L - news) surged 31 percent after the barcode-printer maker's board accepted a 1.03 billion pounds ($1.55 billion) offer from Japan's Brother Industries Ltd.

The blue-chip FTSE 100 index was flat at 6,704.05 points by 1212 GMT after rising as much as 6,738.95 earlier in the session.

The UK mining index fell 0.8 percent, the top sectoral decliner, following data showing growth in China's investment, retail sales and factory output all missed forecasts in January and February, leaving investors with little doubt that the economy is still losing steam.

"UK miners in particular are very closely correlated with Chinese industrial production data and are very sensitive to bad news," said James Butterfill, global equity strategist at Coutts. "But we continue to like miners as they are trading on very attractive valuations and have good dividend yields."

Miners BHP Billiton, Antofagasta and Fresnillo (Other OTC: FNLPF - news) fell 0.9 to 2.3 percent.

Among other sharp movers, mid-cap oil explorer Cairn Energy fell 19 percent after filing a dispute notice against the Indian income tax department over a $1.6 billion tax claim.

British online and catalogue-based plus-size apparel retailer N Brown Group Plc fell 14.3 percent after it cut its full-year profit forecast for the second time.

"N Brown (LSE: BWNG.L - news) blamed a challenging autumn for lowering its full year profit expectations. However its slowdown may raise questions about renewed competition from established clothing retailers as they move into more multi-channel offerings," said Lewis Sturdy, dealer at London Capital Group. (Additional reporting by Francesco Canepa; Editing by Gareth Jones)