* UK union wants to focus on talks to end fuel dispute
* Drivers queue at petrol stations; some outlets run dry
* Govt accused of bungling response, causing panic buying
By Peter Griffiths
LONDON, March 30 British unions ruled out an Easter strike by fuel delivery drivers on Friday after the government was accused of triggering panic-buying and long queues at garages with its "incompetent" handling of the dispute.
The Unite union lifted the threat of action over one of the busiest weekends on the roads, saying it wanted to focus on talks next week with haulage contractors.
It follows days of uncertainty that prompted fierce criticism of government ministers who had been seen as exacerbating the situation by advising motorists to top up their cars and fill fuel cans.
Opposition leader Ed Miliband accused the government of "playing politics", seeking to divert attention from days of negative headlines about the Conservative Party's donors, an unpopular new tax on hot snacks and a growing sense that the leadership is out of touch with hard-pressed families.
"This is not a political dispute, it is an industrial dispute," said Unite's deputy head Diana Holland. "The government's recent rhetoric will not help us achieve a negotiated settlement. They must set aside their political objectives and work with us."
Motoring groups said ministers' advice had generated "self-inflicted" shortages and queues at garages. Demand for petrol was 172 percent higher than normal on Thursday, a petrol retailers' trade body said.
Cabinet Office Minister Francis Maude told motorists on Wednesday to fill (20-litre) jerry cans with petrol and store them at home. A day later, Transport Minister Mike Penning said that was a mistake. Fire brigades said it was dangerous and illegal to store so much fuel in one container.
The dangers were highlighted by an accident at a house in York, northern England, which left a woman in her 40s with severe burns.
The woman set herself alight and suffered severe burns when a cooker ignited petrol fumes in her kitchen as she transferred fuel between containers.
"Her daughter had asked if she had any petrol and the mother had said yes. So they were decanting petrol from one container to another," a spokesman for the North Yorkshire Fire and Rescue Service said. "Unfortunately, they were inside a building where there was an ignition source."
With pressure mounting on the government to take control of the issue, Energy Secretary Ed Davey was meeting fuel delivery companies to discuss contingency plans in the event of a strike. The dispute covers a broad range of issues, including pay, pensions, working conditions and health and safety matters.
Finance minister George Osborne said on Thursday that a fuel strike was "the last thing the economy needs". Britain's economy contracted in the last three months of the year and households are struggling under the weight of government austerity measures, weak wage growth and high unemployment.
A survey on Friday showed British consumer confidence unexpectedly fell to a three-month low in March as people worried about the outlook.
Conservative Party co-chairman Sayeeda Warsi said it had been a difficult week for the government, but she defended its warnings to motorists.
"We may have queues outside petrol forecourts but we're not running out of fuel ultimately because that fuel is being topped up," she told BBC radio. "I would much rather have a government that is preparing and planning than have a government that was sitting on its hands and waiting for the trouble to come to us." (Editing by Steve Addison)