* FTSE rises 0.3 percent
* Miners up on hope of end to Australian mining tax plan
* Energy stocks slide as BG pares gains
By David Brett
LONDON, Aug 23 (Reuters) - Miners led Britain's top share index higher early on Monday, outpacing falls in energy stocks, after an inconclusive election in Australia boosted prospects of a proposed punitive mining tax being scrapped.
By 0752 GMT, the FTSE 100 was up 8.55 points, or 0.3 percent, at 5,203.83, having closed 0.3 percent lower at 5,195.28 on Friday, its lowest close since July 20.
Miners were the biggest risers as investors speculated that inconclusive weekend elections in Australia would deliver a change of government, ushering in a new minority conservative rule that would scrap a planned mining tax.
Rio Tinto and BHP Billiton added 0.8 and 0.7 percent respectively.
BHP Billiton, however, faces a battle for the takeover of Potash Corp, which has been contacted by China's Sinochem Group and Brazil's Vale as the Canadian firm battles a hostile $39 billion takeover offer from BHP Billiton, Bloomberg reported on Monday.
"In terms of a positive trend we have some more M&A speculation but that doesn't seem to have lit the touch paper in terms of the market," Richard Hunter, head of UK Equities at Hargreaves Lansdown Stockbrokers said.
"Its a continuation of the August theme of light volumes and fragile sentiment."
Banks were higher with HSBC up 0.3 percent on reports it will buy up to 70 percent of South Africa's Nedbank, in a potential $6.8 billion deal that would give Europe's largest lender a gateway to the fast-growing African continent.
British insurer Old Mutual, which owns a controlling stake in Nedbank, was the top FTSE 100 riser up 5.0 percent.
OIL SLIDE
Energy shares were the worst performers on London's blue- chip index. BG Group, which rose 6.0 percent on Friday on M&A speculation, pared gains falling 1.0 percent.
Royal Dutch Shell, which newspapers cited as a potential bidder for the gas producer, fell 0.6 percent, while peer BP shed 0.8 percent.
Cairn Energy dropped 0.7 percent as Vedanta Resources' proposed acquisition of a majority stake in Cairn India came under threat from India's petroleum ministry, which wants state-owned Oil and Natural Gas Corp to be given a chance to buy the holding, the Mint newspaper reported on Monday.
Oil and gas services company Petrofac gained 2.0 percent after it forecast a 20 percent rise in net profit for the full year as its backlog of contracts continued to grow and it won its first contract in Iraq. SABMiller was the top faller, down 1.2 percent as the beverage giant and Asahi Breweries were reportedly looking at Foster's Group's beer operations, valued at more than $10 billion, but have not yet made any formal offers, sources said.
(Editing by Erica Billingham)