* UK wants to discuss EU's plan for 21-month transition
* Draft paper says UK still thinks 2 years or so should be enough
* Draft says timeframe should depend on practical needs
* Brussels has said transition period is 'not a given' (Adds more on UK position)
LONDON, Feb 21 (Reuters) - Britain wants to discuss the length of any post-Brexit transition period with the European Union, but believes that around two years should be enough time to prepare "new processes" and "new systems", according to a draft paper.
Prime Minister Theresa May hopes to seal a deal with the EU on a transition period in March this year, to offer companies some certainty a year before Britain is due to leave the bloc, and has repeatedly said it should not drag on indefinitely.
But EU officials say they doubt whether Britain will be ready to make a full break by Brussels' proposed date of Dec. 31, 2020, and are preparing for a much longer goodbye, an idea anathema to hard Brexiteers.
In a draft paper responding to the EU's guidelines for the transition period, May's government said the timeframe "should be determined simply by how long it will take to prepare and implement the new processes and new systems that will underpin the future partnership".
"The UK agrees this points to a period of around two years, but wishes to discuss with the EU the assessment that supports its proposed end date," it said.
May's spokesman said the statement did not mean Britain wanted to extend what May calls an 'implementation phase', but rather that the government wanted to question the EU's position that the end of the transition should coincide with the end of the bloc's current seven-year budget period.
"There is nothing remotely new," he told reporters.
Britain still wants to agree a fixed date and hopes that can be approved by EU leaders at a summit on March 22-23.
Britain's Brexit secretary David Davis told a parliamentary committee in January that "around two years" meant between 21 and 27 months. The EU proposal is for just 21.
"NOT A GIVEN"
The EU and Britain had been expected to agree to a largely status-quo transition quite quickly, but Barnier said this month that a deal was "not a given" after accusing London of bringing up "substantial" objections to the bloc's offer.
One point of conflict is the rights of EU citizens. May has stood by her position that those arriving after March next year should have different rights to those who entered before. The British government says those arriving during the transition period will have different expectations.
But May told parliament that she wanted people to stay.
"They've made a huge contribution to our country, that's why we want them and their families to stay. I'm absolutely clear that EU citizens living lawfully in the UK today will be able to stay," May said in parliament.
Overall, the government's draft document did little to highlight the areas where the two sides may disagree.
It made little more than technical changes to an EU document and simply underlined Britain's desire to agree swiftly on foreign, security and defence affairs and, after doing so, for any deals to come into force even during the transition.
Britain also wants a way to object to new EU legislation during the transition - something that may address the fears of hardline Brexit campaigners who have written to May to demand that she toughen her negotiating position.
"The UK believes this document demonstrates that there is broad alignment between the UK and EU positions, with only a small number of areas requiring discussion," the paper said.
"This reflects the desire of both parties to provide certainty as swiftly as possible to individuals and businesses in the UK and across the EU about the arrangements that will apply from the point of the UK's withdrawal." (Reporting By Elizabeth Piper and Andrew MacAskill in London; additional reporting by Jan Strupczewski, Gabriela Baczynska, Philip Blenkinsop in Brussels; Editing by Kevin Liffey, William Maclean)