* Brown says will support BoE when time comes to halt QE
* PM says reversing stimulus would put recovery at risk
* Government outline asset sales to help cut budget deficit
(Recasts)
By Matt Falloon
LONDON, Oct 12 (Reuters) - British Prime Minister Gordon Brown said on Monday that opposition Conservative Party plans to reverse the huge monetary and fiscal support thrown into the economy would derail the recovery.
With an election expected next May, both Brown's Labour Party and the Conservatives are trying to show they have the most credible plans to guide the economy and cut the burgeoning budget deficit.
"What I am warning about is those people who believe that you can remove the monetary and fiscal stimulus overnight ... withdraw that stimulus now in its entirety and you'll have a problem," Brown told a business audience.
A warning last week from Conservative leader David Cameron that the Bank of England's policy of pumping money into the economy should stop soon to avert an inflation spike surprised analysts as it is rare for politicians to go so far in commenting on the policies of the independent central bank.
The Conservatives, leading Labour in opinion polls by a large margin, fear that ballooning debt is undermining confidence in the economy and is putting Britain's top notch credit rating at risk.
Brown said he expected market appetite for government bonds to remain strong and confirmed asset sales of 16 billion pounds ($25.38 billion) over the next two years as part of measures to halve the budget deficit over the next four years.
But analysts said markets wanted to see more longer-term moves to tackle record government borrowing.
Britain's economy is slowly emerging from its steepest recession in decades as a 175 billion pound scheme from the BoE to purchase assets, mainly government debt, and extensive government support measures start to feed through.
Analysts believe the BoE is close to calling a halt to its quantitative easing (QE) efforts, but opinion is divided over when it might begin to actually remove the stimulus, given big headwinds to recovery.
"When the Bank of England makes the decision, as it will at some stage, to suspend that (QE), I believe that all of us will be able to support it," Brown told a business audience.
DIVIDING LINE
Ratings agency Moody's told Reuters in an interview on Monday the focus on the health of the public finances during the past three weeks of political party conferences had reinforced the stable outlook for Britain's triple A rating. [ID:nLC348841]
And despite having to issue far greater amounts of gilts to fund its fiscal plans, Brown said markets had not taken fright.
"The experience over the last few months is that people are prepared to buy and I don't see that changing over the next few months either," he said.
As reported on Sunday, Brown set out plans to sell assets to help cut the budget deficit.
"We plan a sale of assets to deal with our debt issues. I've said today that 16 billion of assets will be sold within the next two years," he said.
The asset sales include betting company the Tote, the cross-channel rail link between Britain and France, a portfolio of student loans and the government's stake in uranium-processing firm Urenco.
Some of these asset sales -- such as the Tote, the student loans portfolio and the 33 percent Urenco stake -- had been mooted before, but did not come to fruition because of difficult market conditions during the financial crisis.
"It's encouraging they are doing something but these are not underlying changes to the structure of the public finances -- they are one-off moves," said George Buckley, chief UK economist at Deutsche Bank.
"I think markets would prefer to see something a little bit more long-lasting than asset sales." (Additional reporting by David Milliken and Keith Weir, Editing by Ron Askew)