UK's opposition extends opinion poll lead after budget

LONDON, March 27 (Reuters) - Britain's main opposition Conservative party has extended its opinion poll lead over the ruling Labour party to eight points, which would make it the largest party in an upcoming election but with no overall majority.

This week's budget may have had some influence on voters' intentions, researchers said, while a British Airways BAY.L cabin crew strike may have added to Labour's woes.

The News of the World ICM poll had the Conservatives on 39 percent, up one percentage point, Labour on 31 percent, down one, and the third-biggest political party the Liberal Democrats unchanged on 19 percent, since its previous poll last week.

"It does put more daylight between the Conservatives and Labour," said ICM Associate Director Martin Boon. "Our polling was conducted after the budget so the widening of the gap might imply that voters were left unimpressed with the measures announced."

If the projections were repeated uniformly across the country at the election, the Conservatives would be the largest party in a 650-seat parliament, but 17 seats short of an overall majority, the paper said.

Polls have shown the Conservatives' once commanding lead tighten in recent weeks, putting in doubt its ability to end 13 years of Labour rule.

Financial markets fear a minority or coalition government would be reluctant to take the strong action investors want to cut the budget deficit, forecast to reach 167 billion pounds this year.

A so-called hung parliament could leave the Liberal Democrats as kingmakers with either the Conservatives or Labour needing their support to pass laws.

Finance minister Alistair Darling promised on Wednesday a 2.5 billion pound package to boost economic growth, higher taxes for the well-off and lower borrowing than predicted three months ago in his last budget before an election expected on May 6.

The NoW/ICM poll found that nearly a quarter (24 percent) of the 1,000 people quizzed between March 24-25 were less likely to vote Labour after the budget, with 9 percent saying they were more likely.

BA cabin crew carried out the first of its two-planned strikes over pay and jobs last weekend. The strike by Unite members has embarrassed Prime Minister Gordon Brown as the union is his Labour party's largest financial backer.

But the newspaper also attributed some of the Conservative bounce to the news that the party's leader David Cameron is to have a baby with wife Samantha in September. (Writing by Avril Ormsby; Editing by Diana Abdallah)