UPDATE 1-France takes aim at UK's dominance in euro trade

LONDON Dec 3 (Reuters) - The City of London should no longer be the euro's main financial centre, and the euro zone should gain "control" of most financial business in the region, France's central bank governor said in an interview published on Monday.

Banque de France Governor Christian Noyer said there was "no rationale" for allowing the UK to be the "offshore" financial hub of the euro zone.

"Most of the euro business should be done inside the euro area. It's linked to the capacity of the central bank to provide liquidity and ensure oversight of its own currency," Noyer told the Financial Times while touring Asia to promote Paris as a trading centre for China's renminbi currency.

The comments from the central banker, who is also a member of the European Central Bank's governing council, may stir UK fears of a euro zone plot to end London's status as Europe's financial centre.

Britain is demanding safeguards to prevent the European Central Bank from hijacking the regulatory agenda and imposing rules on EU countries that are not in the single currency as the euro zone moves towards a banking union.

During a visit to Paris, British Business Secretary Vince Cable responded to Noyer's comments, telling journalists: "I don't think (his) analysis was correct."

Noting that the British banking sector has contracted a lot since 2008, Cable said his government wanted British banks to concentrate first on the domestic economy rather than look to the rest of the world for business.

"Having a strong financial sector (in London) is good for the European Union," he added.

Noyer has irked London before. Last December, he said it made more sense for credit rating agencies to downgrade Britain than France judging by the two countries' economic fundamentals.