* UK government to direct help to growth industries
* UK seeks to prepare ground for recovery
* Government says goal is to remove barriers for business
By Adrian Croft
LONDON, April 20 (Reuters) - The British government said on Monday it will adopt a more activist industrial policy to drive recovery from the recession, marking a shift from its philosophy of leaving everything to market forces.
The new policy will target government help towards growth industries, as it seeks to foster new sources of expansion after the credit crunch dealt a crushing blow to financial services on which much of Britain's previous prosperity has been based.
Before Wednesday's budget, when finance minister Alistair Darling is expected to unveil record government borrowing and acknowledge the recession is far deeper than he expected, the government wants to focus on preparing Britain for recovery.
"To succeed in this hi-tech, low-carbon economy of the future, to drive growth and to secure more high-value jobs in the UK, we need to act," Business Secretary Peter Mandelson said in a speech at Loughborough University's Innovation Centre.
"It's not about picking winners or ignoring market signals but removing barriers which hold business back," he said.
Prime Minister Gordon Brown is desperate to turn the spotlight back on to what his government is doing to help recession-hit business and end more than a week of damaging headlines about offensive emails sent by one of his closest advisers.
The scandal has helped propel the opposition Conservatives to a lead of up to 19 points in the opinion polls, with the next election no more than 14 months away.
Britain has traditionally adopted a free market approach to industry and has been at odds with more interventionist countries such as France, but the new policy moves it closer to the continental model.
It has already been forced to intervene to shore up or nationalise several banks hit by the credit crunch.
MORE ACTIVE APPROACH
A government policy statement said a changing economic landscape "demands a new and more active approach from government".
It said the government could help industry by providing infrastructure, training or investment in innovation "where the market left to itself may under-invest".
The new policy calls for concerted action to back businesses in sectors such as pharmaceuticals, aerospace, nuclear energy and business services where Britain has strengths.
The strategy includes more help for exporters, more support for turning ideas into successful products and steps to improve infrastructure, energy and broadband networks.
The government said it would look at whether it could take more steps to increase the supply of long-term growth capital to smaller firms, which complain they have been starved of credit.
The policy statement said there was a case for the government targeting support on growth areas of the economy, for example by helping with training or with gaining access to capital.
The government also had a role in "shaping the market" when it buys goods and services, it said.
It said the new approach did not involve "national ownership of industry, the picking of national winners, the revision of European state aid rules or the erection of trade barriers". (Reporting by Adrian Croft; Editing by Andy Bruce)