UPDATE 1-UK's PM May to set out Brexit wish-list as opponents plot ambush

* May to give Brexit speech on March 2

* UK believed to favour mixed approach, EU wary

* Rebel Conservatives, Labour Party back customs union (Recasts, adds Labour, Blair and Hammond)

LONDON, Feb 23 (Reuters) - Prime Minister Theresa May will outline her wish-list for Britain's post-Brexit relationship with the European Union next week after winning support from key ministers, but her opponents hope to defeat the government on the issue of future trade ties.

EU leaders have repeatedly pressed May to provide details of her vision for future relations, but she has been hampered by divisions within her ruling Conservative Party, with some backing continued close ties and others seeking a "clean break".

In an attempt to forge a common position, May hosted an eight-hour meeting of her so-called Brexit war committee on Thursday at her 16th century country residence outside London, though few details of the discussions have been released.

One source said May had accepted the argument of those ministers who wanted to diverge from EU rules and regulations more quickly than others. A photograph released by May's office showed ministers smiling in a wood-panelled room.

"It was a very positive meeting and a step forward, agreeing the basis of the prime minister's speech on our future relationship," May's spokesman told reporters, adding that she would deliver her speech on March 2.

"The prime minister has set out her plans clearly; we are working towards getting a deal that we believe will work for all parts of the UK and deliver as frictionless a border as possible and tariff-free trade."

Britain, due to leave the EU on March 29, 2019, at 2300 GMT, has little time to negotiate the terms of the divorce and the outlines of the future relationship.

The other 27 members of the EU, who combined have about five times the economic might of Britain, have a strong incentive to deny the UK a deal that is so attractive that it might encourage others to follow the British example.

The EU will not agree to the kind of "managed divergence" Britain is believed to favour in its future relationship, sources in Brussels said on Thursday. Under that deal, Britain would stick to EU rules in some areas, diverge moderately in others and opt for very different solutions for the rest, but the EU says this smacks of "cherry-picking".


Many businesses and investors complain that they still lack details on how trade will flow between the world's biggest trading bloc and its sixth largest economy after Brexit.

Finance minister Philip Hammond, the most pro-European of May's senior team, said he felt a "real sense of momentum" towards agreeing a transition deal with the EU at a summit next month.

But former British prime minister Tony Blair said the government was not being realistic.

"They're basically still in 'have cake and eat it' mode and it won't work," Blair said. If Britain wants a close trading relationship with the EU it will have to keep in line with EU rules and standards, he added.

Opponents of Brexit in Britain are seeking to halt the process and even trigger a rerun of the shock 2016 referendum.

The odds of stopping Brexit are now close to 50:50, said Eloise Todd, the chief executive officer of 'Best for Britain', which is about to launch a major campaign.

Rebel Conservative lawmaker Anna Soubry is seeking to amend the government's trade bill to oblige Britain to form a customs union with the EU after Brexit, a move that would complicate May's own attempts to find unity in her divided party.

That chimes with the main opposition Labour Party, whose spokeswoman for foreign affairs said it would seek to join a new customs union with the EU after Brexit.

"Technically, because we're leaving the European Union, we can't be in the customs union we are in now," Emily Thornberry said. "We leave and then we have to negotiate a new agreement that, we think, is likely to be a customs union that will look pretty much like the current customs union."

Labour leader Jeremy Corbyn, who says he supports leaving the EU, is due to give a speech on Brexit on Monday. His party has said it will have a strong emphasis on retaining the benefits of the EU's Single Market and the Customs Union. (Writing by Guy Faulconbridge; Editing by Gareth Jones)