* Cutting red tape part of campaign to keep UK in the EU
* EU pilloried for rules from hairdressing to bottled water
By Robin Emmott
BRUSSELS, Oct 25 British Prime Minister David Cameron pressed European leaders on Friday to scrap red tape that London says is strangling small companies, but won from them only a vague commitment to lighten regulation.
Armed with a 60-page report and accompanied by prominent business leaders, Cameron set out to tackle the grievances of British Eurosceptics who complain the bloc's rules are petty, pernicious and overbearing.
"I've brought some of the best business brains in Britain here to Brussels to talk about the regulation we can cut," Cameron said as he arrived at the second day of the EU summit.
In the marble summit building in Brussels, Cameron sought support from German Chancellor Angela Merkel and other EU leaders during a meeting that included the head of the European Commission, Jose Manuel Barroso.
The chief executive of Marks & Spencer, one of Britain's best-known shopping chains, was also present.
Cutting regulation is at the heart of Cameron's campaign to convince British voters that remaining in the 28-nation bloc of 500 million people is in Britain's interest before a promised referendum on its continued membership.
Cameron has promised a referendum if he is re-elected in 2015, but Britain's allies such as free-trade advocates Germany and the Netherlands are loathe to see London leave.
In their final summit statement, EU leaders will promise to support the Commission in its efforts to scale back unnecessary laws under a programme dubbed "REFIT" in Brussels.
Leaders will welcome "the steps taken by the member states and the EU aimed at better identification of excessively burdensome regulation," the summit statement will say, according to a draft copy seen by Reuters.
"Substantial efforts are required in this respect, both at EU and national levels," it will say.
The global financial crisis and the euro zone's debt troubles have badly damaged trust in the European Union while mistrust of EU lawmaking has grown as the European Commission, the EU executive, takes on more power to coordinate a club that has expanded across Eastern Europe over the past decade.
Critics have pilloried the Commission for rules such as one preventing drinkmakers from claiming that water can treat dehydration. Brussels has had to drop plans to force restaurants to serve olive oil in sealed bottles instead of dipping bowls.
Cameron's report on red tape, compiled by business leaders and chaired by Business Minister Michael Fallon, said there were too many "pointless, burdensome and costly regulations".
It makes more than 30 recommendations, in areas from environmental safeguards to paid maternity leave. For instance, dropping an EU rule that requires firms to keep health and safety records could save 2.7 billion euros ($3.67 billion), it said.
The Commission said this month it will review EU laws and be careful when writing new ones, marking a change of tone at the body that proposes laws for the bloc's members.
Barroso has said the Commission has cut the cost of administrative burdens by 32.3 billion euros over the last five years and scrapped 5,590 legal acts.
But with the Commission responsible for regulating across all areas of European industry and in the process of overhauling the continent's financial architecture, there is little prospect of a huge reduction in the number of EU laws.