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UPDATE 1-Norway PM casts doubt on temporary British EFTA membership

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ARENDAL, Norway, Aug 14 (Reuters) - Norway cast doubt on Monday that Britain could easily join it in a half way house trading group after Brexit.

Prime Minister Erna Solberg told Reuters it would be challenging and costly for Britain to rejoin, even temporarily, the European Free Trade Association, or EFTA, because it would bring with it some of the obligations that Britain objects to in its dealings with the European Union.

Membership of EFTA, which London helped found in 1960 but later left, is one option being discussed to allow Britain to remain in the EU's common market -- the European Economic Area.

"There would be a cost they would have to share, and an authority outside their border that could impose binding decisions on them, which is not entirely in line with what they've said they want," Solberg said on the sidelines of a news conference.

She added that Norway was nonetheless "prepared for various scenarios".

It is far from clear whether London would want to rejoin EFTA, although there are various ideas being floated to stop a "cliff edge" Brexit in 2019 in which British business is left hanging.

Oslo, which has chosen to remain out of the EU but follows many of its rules, is closely following divorce talks between Brussels and London.

EU negotiator Michel Barnier visited Norway earlier this year to reassure Norwegians they would be kept in the loop about the talks.

Norway is concerned, among other things, about the fate of Norwegians living in Britain after Brexit; fisheries policy; what kind of terms would be given to Britain after Brexit and whether Britain would get preferential treatment over Norway.

Within EFTA, all member countries have to approve new members, giving each a theoretical veto. Current members are Norway, Iceland, Switzerland and Liechtenstein.

Alongside being members of EFTA, Norway, Iceland and Liechtenstein also have free movement of goods, services and people with the 28-nation EU. Switzerland is outside that deal. (Writing by Terje Solsvik and Gwladys Fouche, editing by Jeremy Gaunt)