EU hedge fund rules may hurt competitiveness -UK source

LONDON, March 15 (Reuters) - Britain does not want hedge funds to be given a free ride by regulators but fears that proposed European Union regulations will make Europe a less attractive place to do business, a government official said.

"The UK has been at the forefront of moves to widen the regulatory net. We're clear there's no free pass for hedge funds, but we need to get the implementation right," the source told Reuters on Monday.

"We've worked to improve the directive a great deal, but we still have significant concerns about how its implementation could impact on EU competitiveness."

EU policymakers meet on Tuesday to agree a law to control hedge funds and Britain, which supervises 80 percent of Europe's hedge fund managers, is concerned that the rules could force out foreign hedge funds.

(Reporting by Matt Falloon)