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UK probe blames 787 fire on short circuit, urges more battery tests

(Adds details on safety recommendations, Boeing (NYSE: BA - news) comment, share move)

LONDON/NEW YORK, Aug 19 (Reuters) - Britain's air safety investigator on Wednesday blamed a short-circuit involving a lithium-metal battery for a 2013 fire on a Boeing Co 787 Dreamliner parked at London's Heathrow Airport and called for further scrutiny and testing of lithium batteries on all aircraft.

The UK's Air Accidents Investigation Branch (AAIB) said in its final report on the incident that it believes the fire was probably started by crossed wires in the jet's emergency locator transmitter (ELT). The fire damaged the aircraft's rear fuselage as it stood empty on a remote stand at the airport.

Boeing shares fell 1.3 percent to $142.66 on the New York Stock Exchange.

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Runways at Heathrow, Europe's busiest airport, were briefly closed as firefighters dealt with the blaze on the jet, operated by Ethiopian Airlines.

The Heathrow fire in July 2013 came at a difficult time for the Dreamliner. The entire fleet of planes had only recently restarted flying following a three-month grounding by regulators earlier that year after lithium-based batteries overheated. Those batteries are used for backup power and other functions on the high-tech plane.

Since the incident the AAIB has already made 14 safety recommendations and Boeing and the U.S (Other OTC: UBGXF - news) . aviation regulator, the Federal Aviation Administration (FAA), have undertaken safety actions.

In addition, ELT manufacturer Honeywell International Inc (NYSE: HON - news) is redesigning the unit using the AAIB's findings.

The AAIB added new recommendations on Wednesday. Among them, regulators in the U.S., Europe and Canada should:

-Review use of lithium-metal battery on aircraft to ensure all equipment has adequate circuit protection, and ensure the equipment complies with rules on toxic gas venting.

-Require that equipment makers that use such batteries determine the amount of heat they can produce and design systems that can "adequately dissipate the heat."

-Require battery and equipment makers to conduct tests to determine possible failure conditions and their effects.

Boeing cautioned that the AAIB recommendations need careful study.

"It (Other OTC: ITGL - news) is important that any potential changes to the airplane's design be reviewed with great care, and with due consideration for any potential unintended consequences of any change," the company said in a statement emailed to Reuters.

Boeing noted that the U.S. FAA had already recommended inspections of Honeywell RESCU 406 ELTs across all models of aircraft, and that "operators have confirmed to the FAA that all in-service ELTs are in compliance with federal regulations."

The FAA and Honeywell did not immediately respond to requests for comment.

(Reporting by Sarah Young in London and Alwyn Scott in New (KOSDAQ: 160550.KQ - news) York; Editing by David Holmes and Bill Rigby)