UPDATE 1-Putin faces isolation over Syria as G8 ratchets up pressure
* Focus turns to tax, trade, transparency
* More tough talks expected on day two of G8 summit
* Obama, Putin disagreed over Syria in tense meeting
(Adds background, details of talks)
ENNISKILLEN, Northern Ireland, June 18 (Reuters) - Russian President Vladimir Putin faced growing isolation on the second day of a G8 summit on Tuesday as world leaders lined up to pressure him into toning down his support for Syrian President Bashar al-Assad.
Syria was set to dominate the last day of the meeting in a secluded, heavily guarded golf resort in Northern Ireland, with Putin standing firm on his position that forcing out Assad would be disastrous for Syria and the region.
Following a frosty encounter between the Kremlin chief and U.S. President Barack Obama on Monday, G8 leaders sought to use the last day of talks to find common ground on a transition of power in Syria despite Russia's stance.
If there is no consensus, it is possible a final G8 statement might be released without Russia's input and in the name of the G7 rather than the G8, officials indicated.
Such a scenario would further damage Russia's position on the world stage. But is something Kremlin-controlled media would probably seize upon to portray Putin as standing up to a bullying and imperialistic West, a familiar charge that still plays well for him at home.
Putin, who appeared tense on the first day, has faced a barrage of criticism from Western leaders for supporting Assad, who is trying to crush a two-year-old uprising in which at least 93,000 people have been killed.
"It's a clarifying moment to see what kind of commitments the Russians are willing to make in a leading world forum," a British official said before the leaders met for dinner.
Russia and the United States have agreed to bring together warring sides for a peace conference but their goals are different. Obama wants Assad out while Putin believes it is too dangerous to remove him at a time when there is no clear transition plan.
It is unclear what Obama could offer Putin as an incentive to change his mind on Syria as there is little he seems to be looking for at the summit.
But it appeared some form of consensus was still possible. An official close to one delegation said the talks over dinner on Monday had gone better than expected and that a joint communique with Russia on Syria now seemed more likely.
A person with direct knowledge of the talks said on condition of anonymity that Putin was constructive and willing to reach consensus during late Monday talks and no hard words were exchanged between him and Obama.
However, Russian Foreign Minister Sergei Lavrov said on Tuesday the Syrian opposition must not set preconditions for attending the peace conference proposed by Moscow and Washington, suggesting sticking points remained.
Renewed diplomatic tension over Syria stems from last week's decision by the United States to step up military aid to the rebels, including automatic weapons, light mortars and rocket-propelled grenades.
For Russia, Syria is not just a strategic issue. It is one of its last bastions of support in the Middle East and has cultural ties that go back decades. The Russian navy also has a vital base at the Mediterranean port city of Tartus.
TAX AND TERROR
British Prime Minister David Cameron, who is chairing the summit, will also move the conversation on to taxation and how global powers can help close international loopholes.
Cameron has been stung by revelations that the likes of Google and Starbucks have sharply cut their corporate tax bills in Britain using legal loopholes.
Last week he sought to turn up the pressure on other rich economies by pressing Britain's overseas tax havens into a transparency deal and announcing new disclosure rules for British firms.
Worries about global economic weakness and Japan's sweeping stimulus policies also dominated the meeting. Japanese officials welcomed the G8's stance on Prime Minister Shinzo Abe's plan as a vote of confidence in the government's strategy to revive a lacklustre economy.
(Additional reporting by Andrew Osborn, William Schomberg, Guy Faulconbridge, Roberta Rampton, Alexei Anishchuk and Jeff Mason in Enniskillen; Writing by Kate Holton and Maria Golovnina; Editing by Andrew Osborn and)