* Hungary govt wants talks with EU Commission on media law
* Govt may narrow scope of balanced coverage provisions
* Brussels concerned new Hungarian law contravenes EU rules
(Releads with Hungarian government comment)
BUDAPEST, Jan 31 (Reuters) - Hungary is ready to narrow the scope of a disputed media law and renounce plans to fine foreign media firms that breach it, a senior official said on Monday as Budapest responded to threats of legal action by the EU.
Hungary, which holds the rotating presidency of the European Union, drew sharp rebukes from France, Britain and Germany after enacting the law in late 2010 because of concerns over respect for media freedom and EU regulation on broadcasting.
EU telecoms chief Neelie Kroes had set out a two-week deadline for Hungary to show its media law complies with EU rules or face potential legal action in a letter sent to Budapest on Jan. 21.
Hungary sent its reply to Brussels on Monday, State Secretary Zoltan Kovacs told a news conference, adding that the government was open to changes if the Commission found the law contravened European rules.
"The space for intelligent dialogue opens up now," he said. "It's high time that happened after all the pointless talk and political attacks," he said.
Earlier on Monday Kovacs told public radio MR1-Kossuth the response would address each of the commission's objections and the government was open to further consultations about the law.
The Commission, which serves as the EU executive body, is concerned the new rules may limit freedom of expression in Hungary by requiring all broadcasters to provide balanced coverage of news and to register with a state authority.
Kovacs said those rules could be revised.
"The Hungarian government... is ready to change the law to better specify the group of on-demand audiovisual services where the government wants to enforce balanced coverage," he said.
He added that the government may ease or remove altogether the balanced coverage mandate for certain television and radio stations.
Another concern is that the law appears to apply to media companies established outside of Hungary, which would contravene EU regulations that say broadcasters are subject to rules in their country of origin only.
Kovacs said that the government would ease regulations on foreign media companies, foregoing the option to impose fines and instead exercising oversight in other ways.
Hungary says its media law conforms to EU norms and contains passages present in similar legislation of other member states. (Reporting by Gergely Szakacs and Marton Dunai; Editing by Jon Boyle)