Britain's FTSE, sheltered from euro strength, has best week since May

* FTSE 100 falls 0.5 pct, mid-caps down 0.1 pct

* Best week since May for blue-chips

* Mid-caps enjoy best week in nearly a year

* Paysafe rockets after private equity bid

* Acacia plummets as Tanzania rift dents outlook (ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets)

By Kit Rees and Helen Reid

LONDON, July 21 (Reuters) - Britain's major share index fell on Friday but had its strongest weekly gains in two months, sheltered from the battering European stocks experienced at the mercy of a strong euro, while mid-caps had their best week in nearly a year.

Britain's FTSE 100 index was down 0.5 percent, substantially outperforming European bourses, having earlier hit its highest level since mid-June.

The relative weakness of the pound, close to an eight-month low against the euro, helped limit losses on the index whose exporting constituents tend to gain with a falling currency.

The blue-chip stocks made a 1 percent gain on the week, their best weekly performance since May.

Meanwhile mid-caps sealed their best weekly gains in nearly a year, up 1.8 percent on the week, though they dipped 0.1 percent on Friday.

They were boosted higher this week by a recovery in construction contractor Carillion (Frankfurt: 924047 - news) , which plummeted last week, and strongly received results from Weir Group (Other OTC: WEIGY - news) and Sports Direct.

"People have been indiscriminately selling the FTSE 250 and buying the FTSE 100, but contrary to what everyone thinks, there are all sorts of opportunities in the mid and small-cap indexes," said Mark Martin, manager of the Neptune UK Opportunities fund.

Mid-caps are up 9.2 percent this year, about double the performance of their larger FTSE 100 counterparts.

On Friday shares in Paysafe rocketing 6.8 percent after a consortium of Blackstone (NYSE: BX - news) and CVC Capital Partners made a 2.86 billion pound ($3.72 billion) bid for the firm, the latest move in a spate of deal-making in the payments industry.

"On first impressions the acquisition appears to make sense, is not a particularly high multiple in the context of payments and we would estimate potential EPS accretion of around 10 percent," UBS (LSE: 0QNR.L - news) analysts said in a note.

Among blue-chips betting firm Paddy Power Betfair (Other OTC: PDYPF - news) led losers, down 3.3 percent after a double downgrade from Investec (LSE: INVP.L - news) .

"PPB should remain among the top five global listed online gambling stocks and so still deserves a premium rating, though below the current level," Investec analysts said.

But they added they saw shorter-term pressure for the shares as the market prices in punter-friendly sports results and a worsening regulatory outlook.

Vodafone shares pared gains to trade up 0.5 percent after hitting a one-month high as it reported better-than-expected revenue growth for its first quarter thanks to a strong performance in Italy and Spain.

"Whilst there's nothing here to kick-start a higher quantum of growth in the medium-term, the efficiency programme and the cash generation plans look to have remained on track," Ken (Shenzhen: 300126.SZ - news) Odeluga, market analyst at City Index, said.

Healthcare (Shanghai: 603313.SS - news) was a rare bright spot, with Convatec and Shire (Xetra: S7E.DE - news) up 1.7 to 1.9 percent.

At the opposite end of the spectrum, shares in mid-cap Acacia Mining (Frankfurt: 33A.F - news) plummeted 17 percent after the troubled gold miner said its output would fall to the lower end of its full-year guidance after its first-half results were hit by Tanzania's export ban.

(Reporting by Kit Rees; Editing by Alison Williams)