* UK yet to rule on mini power plant competition
* Rolls-Royce says international advantage could be lost
LONDON, July 31 (Reuters) - Britain will squander the chance to become a leader in next-generation nuclear power unless it presses on with a competition to build mini reactors, said Rolls-Royce, the designer of the nuclear engines that drive the country's submarine fleet.
Britain, which built the first commercial civil nuclear power station, launched a competition in early 2016 to find the best design for so-called Small Modular Reactors, or plants built in factories with parts small enough to be transported.
The government said it would respond after the submission process that ended in autumn 2016. When asked for an update on Monday, a business department spokeswoman said it was considering the next steps and would communicate in due course.
Rolls-Royce, one of the biggest names to submit a bid, says the competition is crucial for Britain's nuclear sector because the first country to licence a Small Modular Reactor (SMR) would set an international standard, giving those companies the chance to export their technology worldwide.
"Whoever moves first, globally, whoever gets a Small Modular Reactor up and running, licensed, commissioned, built, clearly has first mover advantage globally," Harry Holt, the president of nuclear at the British company, told Reuters.
"A delay begins to erode any first mover advantage we might have had, so clearly it begins to put at risk the full scale of the opportunity we first envisaged."
Having pioneered commercial nuclear power production, Britain now relies on international expertise to develop its nuclear plants, with France's EDF building a new site at Hinkley Point C, with financial backing from China.
Still under development, SMRs have been touted as a cheaper and quicker alternative to building huge plants, piquing the interest of governments that are closing ageing nuclear sites and shutting coal plants to meet climate goals.
Critics say there is no guarantee SMR developers will be able to cut costs enough to make the plants viable.
Using existing or new technology, SMRs can be transported in parts on trucks and barges to sites where they can be assembled and are typically defined as plants producing less than 300 megawatts of electricity.
According to the International Atomic Energy Agency, about 50 SMR designs are in various developmental stages, with four in advanced stages of construction in Argentina, China and Russia.
The British government, which is looking to boost exports as it leaves the European Union, launched a 250 million pound ($329 million) nuclear research and development competition, with a chunk of the money going towards the winning SMR design.
Rolls-Royce, known best for making plane engines, submitted a bid as part of a UK consortium with Amec Foster Wheeler, Nuvia, Arup and Laing O'Rourke, with the Nuclear Advanced Manufacturing Research Centre.
One other group to express an interest in the competition is NuScale, majority owned by U.S. Fluor Corp.
A committee of Britain's upper house of parliament has said the delay is disappointing and risks damaging the industry.
"What we've said very clearly to government is that, as well as the 7 gigawatts (GW) in the UK, we believe there is a substantial export market," Holt at Rolls-Royce said.
As part of its bid the company has asked the government for 500 million pounds of funding for research and development.
"And because we're talking about a UK Small Modular Reactor, with the technology and IP all created here in the UK, it means you can capture the vast majority of value when you're exporting."
The National Nuclear Laboratory, a government owned and operated advisory body, has said Britain could generate up to 7 GW of electricity from SMRs by 2035, compared with a forecast of up to 85 GW for a global market. ($1 = 0.7589 pounds) (Editing by Paul Sandle and David Clarke)