* UK proposes creation of single competition body
* Takeovers and market abuse would be policed by body
* Business lobby welcomes move, says will cut duplication
(Adds reaction)
By Keith Weir
LONDON, Oct 14 (Reuters) - Britain plans to streamline its antitrust regime by merging two existing bodies into a single competition and market authority, in a move broadly welcomed by business leaders.
An official list of public bodies facing reform said the government would consult next year on a merger of the Competition Commission with the competition functions of the Office of Fair Trading (OFT). The proposal would transfer the OFT's consumer and enforcement functions to another body.
The CBI, Britain's biggest business lobby, welcomed the move on Thursday, which it said it had advocated. The heads of the two organisations also backed the proposal.
"The planned merger would improve the efficiency of the competition regime by cutting duplication," said Matthew Fell, CBI Director of Competitive Markets.
"It would also benefit businesses by speeding up merger reviews and market investigations, reducing the time firms are left in limbo," he added.
The changes will be watched closely by M&A lawyers and bankers, particularly those who are in the middle of putting together deals.
As well as examining how far takeovers will impact consumer choice and being the final arbiter on mergers or acquisitions, the two bodies also regularly probe industries for evidence of market abuse or unfair business practices.
SPEED VS QUALITY
One lawyer said the proposal should speed up the handling of cases, but care had to be taken to maintain quality. "There has always been an element of duplication between the two bodies, and anything which shortens the procedure is to be welcomed," says David Marks of law firm CMS Cameron McKenna.
"But there are detriments: the Competition Commission had the great virtue of bringing a fresh pair of eyes, detachment and reliability to the investigatory process.
"The OFT is making the first review to compressed timetables, whereas the Commission has the capacity to make an in depth review of the most complex cases. Squeezing them together may mean replacing a Rolls Royce service with a Mondeo."
The OFT suffered a setback in May when the trial of four senior British Airways executives on price-fixing allegations collapsed after the belated discovery of key e-mail documents.
The OFT on Thursday concluded a long-running probe into the pub industry while the Competition Commission published its final decision banning the sale of payment protection insurance at the same time borrowers take out loans.
The heads of both the OFT and the Competition Commission welcomed the announcement. The OFT employs 600 people and the Competition Commission around 130.
"With the right design, a single competition and markets authority can deliver better, faster results for consumers and the economy, and greater consistency for businesses," said OFT Chief Executive John Fingleton.
(Additional reporting by Estelle Shirbon, Kirstin Ridley and Paul Hoskins; Editing by Erica Billingham)