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Finance firms stick to hard Brexit plans despite calls for softer EU break

(Repeats Monday report)

* Possibility of softer Brexit has risen - executives

* But so too has the chance of a chaotic EU departure

* Finance firms therefore still preparing for the worst

* Global banks plan to move about 9,000 jobs to continent

By Andrew MacAskill and Simon Jessop

LONDON, June 12 (Reuters) - Finance firms in Britain say they are pushing ahead with plans to move staff and operations to continental Europe, despite a chance that the government may soften its 'Hard Brexit' policies after losing its parliamentary majority.

Although the possibility of the ruling Conservatives seeking to keep some British access to the European Union's single market has increased, so too has the likelihood of a chaotic departure from the bloc, executives said, meaning they have to plan for the worst.

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"When the facts change, I'll change my mind," said Keith Skeoch, chief executive of Scottish insurer and asset manager Standard Life (LSE: SL.L - news) , borrowing a quote from economist John Maynard Keynes.

"Until then, I think you continue to plan for a hard Brexit, until you can see evidence of that beginning to shift and change," he told Reuters.

Large global banks in London plan to move about 9,000 jobs in the next two years to financial centres that will stay in the EU, including Frankfurt, Paris and Dublin, so they can continue selling their services across the bloc after Brexit, according to a Reuters' tally of job warnings.

The Conservatives' major setback in the general election last week has deepened uncertainty over Prime Minister Theresa May's plans for Brexit, including a departure from the European customs union as well as the single market, and a focus on controlling immigration.

May's authority has been weakened after her gamble in calling an early election backfired, leaving her increasingly dependent on fellow Conservatives who object to her plan for a clean break from the EU. Some of May's cabinet colleagues and other senior party members are urging her to change direction.

Conservatives in Scotland, which voted heavily to remain in the EU last year, are pushing for May to move the focus of Brexit talks due to start next week onto achieving economic growth and away from immigration, sources in the Scottish party told Reuters.

Scottish Conservatives sharply increased their representation in the Westminster parliament last week, in contrast to the party's losses in England, strengthening the influence of their leader Ruth Davidson within the party.

FOOLISH TO HOLD OFF

Brexit Minister David Davis said on Monday that the minority government still plans to take Britain out of the single market, noting that most Britons voted for either the Conservative or Labour parties which both said they back such an exit.

Miles Celic, the chief executive of TheCityUK, Britain's most powerful financial lobby group, said the comments indicated the government plans to continue with its current strategy and that it retains a parliamentary majority to leave the EU.

"What we have not seen over recent days is any concrete or firm shift in the expectations that we've got regarding timescale," he said.

An executive at one international bank warned that because the negotiating clock is now ticking there is now a higher likelihood that the government will fail to get a deal altogether by the March 2019 deadline.

"You could argue that with the government in minority now, its leadership credibility shot to pieces, there's almost a higher probability of no deal," the executive said. "We would be foolish to hold off on our plans."

A government relations official at another bank said the financial industry will still make a renewed attempt to lobby the government to secure more access to the single market, a staggered exit from the EU and more relaxed immigration controls.

The official expected the blow to May's authority to increase the power of the Treasury and Chancellor of the Exchequer Philip Hammond, benefiting business.

British newspapers had previously reported a rift between May and Hammond and that she had planned to sack him after the election if she had won a larger majority.

"Hammond is a pragmatist, he is business-friendly and the Treasury have done all the serious work on Brexit," the official said. "The door will be a lot more open now than it used to be, and that can only be a good thing."

Rishi Khosla, the chief executive of OakNorth Bank, said the uncertainty around the minority government will hurt the economy for the next couple of years, but in the end it will be a better result for Britain.

"In the short term, individuals and businesses are likely to suffer because of the instability of the government," he said.

However, he added: "It is a great opportunity to reposition after what proved to be an unpopular campaign strategy to come up with something more pragmatic, business-friendly and Europe-friendly." (Additional reporting from Anjuli Davies and Huw Jones; editing by David Stamp)