Key finance rules delayed - paper

LONDON (Reuters) - The core of government plans to overhaul the future regulation of Britain's financial services has been delayed, possibly until after the next general election, the Daily Telegraph reported on Tuesday without citing sources.

Proposals on tightening existing rules are due to be published on Wednesday.

But the Telegraph said the long-awaited policy paper on financial regulation will offer "no firm proposals" on how authorities will control banks' balance sheets.

The document is due to outline how the government aims to avoid a repeat of the worst financial crisis in living memory by giving more power to authorities to intervene quickly.

Although the document would indicate the government needed so-called macro-prudential tools to control the financial system, "it will present topics for discussion rather than hard-and-fast new laws," the paper said.

The Telegraph said it was now highly unlikely to formulate a concrete policy over how these tools will work or who -- the Bank of England or Financial Services Authority -- will wield them until after the election, expected next June.

The newspaper said the decision to delay stemmed from the high degree of complexity surrounding the quest to devise a new "second tool" for economic policy to go alongside interest rates.

(Reporting by Stefano Ambrogi; Editing by Neil Fullick)