UK government under fire for leaving finance sector in dark on Brexit

(Repeats Monday story with no change to text)

LONDON, Jan 22 (Reuters) - Business leaders have criticised Britain's government for its failure to publish a long-delayed paper on the future of its financial services industry after Brexit.

Senior (Other OTC: SNIRF - news) financiers say they were told after the summer that the government would issue a position paper setting out Britain's negotiating priorities for a sector that pays more corporate tax than any other industry.

"When so many other sectors and issues have been given this clarity, the City is left in the dark," Catherine McGuinness, policy chair at the Corporation of the City of London (LSE: CIN.L - news) , the capital's financial district, said on Monday.

"This really is disheartening."

Meanwhile, Treasury Committee Chair Nicky Morgan said the government's failure to publish the paper will send the "wrong signals" and leave financial services companies "seriously concerned at the chronic state of uncertainty".

"Financial services will be one of the most challenging elements of the Brexit negotiations. A paper articulating a clear sense of direction, and a desired end-state, could have boosted confidence that the government is up to the task", Morgan (Other OTC: MGHL - news) said in a statement.

Financial services, which account for about 12 percent of Britain's economic output, potentially have a lot to lose from the end of unfettered access to the EU market once Britain leaves in March 2019.

Banks in London are setting up new hubs in the EU, but have said they may have to shift more staff and operations than they need unless there is clarity on what sort of new trading deal Britain will negotiate with the EU.

Britain's Department for Exiting the European Union declined to say if any services paper would ever be published.

"We will keep under review what is the best way of advocating our position – be that in private discussions with the EU, speeches, or a formal position paper," a spokesperson said.

Prime Minister Theresa May's spokesman told reporters: "We always let you know in the normal way if there is to be one."

Still, finance executives say relations with the government have improved since Britain and the EU last month agreed to the principle of a transition deal and to talks about future trade relationships.

Bankers had complained last year that their concerns were not being heard, but May told them this month they were a priority for her in Brexit talks. (Reporting by Andrew MacAskill, Huw Jones and William James; additional reporting by Kanishka Singh; editing by Alexander Smith)