* FTSE 100 falls 0.1 percent
* Miners hurt; metals prices ease on dollar gains
* Banks fall on persistent euro zone jitters
* Burberry, Smith & Nephew rise on bid talk
By Tricia Wright
LONDON, Dec 8 (Reuters) - Britain's top share index edged lower on Wednesday, held back by miners and bank stocks, while takeover speculation boosted Burberry and Smith & Nephew.
By 1210 GMT, the FTSE 100 was down 3.28 points, or 0.1 percent, at 5,805.17, after it advanced to a three-week closing high on Tuesday, up 0.7 percent to 5,808.45.
"I think (the FTSE 100) is marking time because of the situation in Ireland and in the euro zone, and the potential for QE3 (a third round of quantitative easing) in the U.S.," Martin Dobson, head of trading at Westhouse Securities, said.
"The other factor... is that the Chinese economic announcements for November are coming out at the weekend rather than on Monday. I think there are vague stories going round that there is potential for interest rate rises in China."
Miners fell slightly as copper prices eased on the back of a stronger dollar after U.S. Treasury yields surged on a proposed extension in U.S. tax cuts, and as the concerns over the potential rate hikes in China weighed on sentiment.
Kazakhmys was among the biggest fallers, down 1.3 percent.
Banks were out of favour, with traders pointing to the uncertainty surrounding European sovereign debt.
The Irish government detailed the toughest budget on record on Tuesday, targeting 6 billion euros ($7.93 billion) in spending cuts and tax hikes, and warning passage was crucial to avert a deeper crisis and free up EU and IMF rescue funds.
M&A BOOST
Takeover speculation propelled Smith & Nephew to the top of the blue-chip leader board, up 5.2 percent.
The Daily Mail newspaper's market report noted talk of a 7.1 billion pound, or 8 pounds-a-share cash offer from a U.S. consortium of private equity players for the maker of replacement knees and hips.
Smith & Nephew declined to comment.
Burberry climbed 4 percent as traders cited rumours of bid interest for the luxury goods group.
Burberry declined to comment.
Security services group G4S, meanwhile, put on 4.4 percent, with traders pointing to a big stock overhang being cleared at Merrill Lynch.
Positive broker sentiment lifted Prudential, up 2.9 percent, with UBS adding the insurer to its "Key Calls" list and raising its price target, citing growth prospects in Asia.
On the downside, Capital Shopping Centres (CSC) topped the FTSE 100 fallers' list, dropping 4.4 percent, after shareholder Simon Property said it might quit its 5 percent stake in protest over CSC's 1.6 billion pound ($2.5 billion) plan to buy a UK mall, which it criticised as being value destructive.
3i Group, Associated British Foods, Investec and Vedanta Resources fell after going ex-dividend.
U.S. stock index futures pointed to a mixed opening on Wall Street on Wednesday.
(Editing by Erica Billingham)