UPDATE 1-UK preparing for no deal, but no spend on contingency arrangements yet -Hammond

yet -Hammond@ (Adds context)

LONDON, Oct 11 (Reuters) - Britain is planning for all possible Brexit outcomes, including a 'no deal' scenario, but will not give government departments money to spend on contingency arrangements yet, finance minister Philip Hammond said on Wednesday.

Negotiations with the European Union on an exit deal and a future relationship have made slow progress ahead of a March 2019 deadline for leaving, drawing calls from some lawmakers for Britain to walk away from the talks and start planning for a clean break with the bloc.

"I am clear that we have to be prepared for a no deal scenario unless and until we have clear evidence that that is not where we will end up," Hammond told a parliamentary committee.

But Hammond rejected the idea that Britain should begin putting firm contingency arrangements in place, including a suggestion that it should start spending money on beefing up border and customs capabilities.

"What I am not proposing to do is to allocate funds to departments in advance of the need to spend," Hammond said. "I don't believe we should be in the business of making potentially nugatory expenditure until the very last moment when we need to do so."

Hammond is seen as one of the most pro-European members of Prime Minister Theresa May's cabinet, and has been accused by pro-Brexit lawmakers and campaigners of seeking to water down or even halt Britain's exit from the EU. (Reporting by William James; Editing by Catherine Evans)