UPDATE 1-Energy stocks weigh on Britain's FTSE as May attacks "rip-off" prices


* FTSE 100 steadies

* Centrica, SSE sink as May vows to cap energy prices

* Housebuilders shrug off affordable housing pledge

* Tesco reverses early gains after return to dividend

* Lower crude prices weigh on Shell, BP

* Stronger services data boosts pound, dents FTSE (Updates prices, adds comments on housebuilders)

LONDON, Oct 4 (Reuters) - Energy providers Centrica and SSE dragged on Britain's main share index on Wednesday after Prime Minister Theresa May announced plans to cap energy prices.

The FTSE 100 steadied as British Gas owner Centrica sank 4 percent, closely followed by SSE.

Both energy providers had been falling earlier in the session as traders anticipated an energy policy announcement, and May's criticism of "rip-off" energy prices sent Centrica down to hit a near 14-year low.

"Any move to cap prices would be a massive hit to the industry," said Neil Wilson, senior market analyst at ETX Capital.

"It might cost Centrica something like 200 million pounds and make it much tougher for the firm to reintroduce the progressive dividend policy," he added.

May's pledge of 2 billion pounds towards affordable housing failed to move housebuilders' stocks, which had already rallied strongly in the past week after she unveiled an extra cash injection into a scheme to help first-time homebuyers.

"The housebuilders did very well when the prime minister announced additional funding for 'Help to Buy', because that's a key tailwind the housebuilders have enjoyed and will continue to enjoy for some time," said Laith Kalaf, market analyst at Hargreaves Lansdown.

The money pledged on Wednesday would be aimed at local councils and housing associations rather than directly incentivising housebuilders.

Food retailers were also among top fallers, with Tesco leading losses, down 2.1 percent and closely followed by Sainsbury and Morrisons.

Tesco, Britain's biggest retailer, had opened higher before reversing into negative territory after saying it would resume paying a dividend for the first time in three years, also announcing that first-half profit had risen 27 percent.

Tesco's shares had risen sharply in the previous session as investors anticipated a return to payouts, and its strong beat over earnings expectations had been expected, Berenberg consumer goods analysts said.

"Whilst the dividend was reinstated, again this was expected and came in lower than expected at 1p (our risk arbitrage team was expecting 1.36p)," they added.

Oil majors Royal Dutch Shell and BP dipped, in line with a Europe-wide drop in energy stocks, as crude prices slipped on doubts that a recent rally would last through the last three months of the year.

Standard Life Aberdeen shares fell 2.1 percent after the asset manager said it planned a subordinated debt issue.

(Reporting by Helen Reid; Editing by Kevin Liffey)