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UPDATE 1-Britain's May to set out Brexit vision for trade deal deeper than any other

any other@ (Adds comment from EU official)

LONDON, March 2 (Reuters) - British Prime Minister Theresa May will set out her vision on Friday for a Brexit deal deeper and wider than any free trade agreement in the world, telling the European Union it is in their "shared interest".

In a much-anticipated speech which an increasingly frustrated EU hopes will offer details of her plan for Britain's future after Brexit, May will try to defuse a dispute over the border with Ireland that threatens to stall the Brexit talks.

But the prime minister, weak after losing her parliamentary majority last year, will struggle to satisfy the demands not only of EU officials but also of the warring factions in her Conservative Party and businesses desperate for clarity.

The 61-year-old leader has long kept her cards close to her chest, trying to avoid provoking those who want a clean break with the EU, or others who fear the world's sixth-largest economy will suffer if barriers are raised against a major trading partner.

Excerpts of the speech, issued before Friday's event in London, offer little detail, but say May will be guided by five tests including respecting the result of the Brexit referendum and reaching a solution that can endure.

"So I want the broadest and deepest possible agreement - covering more sectors and co-operating more fully than any Free Trade Agreement anywhere in the world today," May will say.

"I believe that is achievable because it is in the EU's interests as well as ours and because of our unique starting point, where on day one we both have the same laws and rules. So rather than having to bring two different systems closer together, the task will be to manage the relationship once we are two separate legal systems."

May hopes the speech, titled "Our Future Partnership", will round off a series of briefings by her ministers to settle the question of how Britain sees its future outside the EU and its economic architecture after more than 40 years.

But at least for one EU official, her words so far were underwhelming. "If she says nothing more than that, too bad," the official said on condition of anonymity. "It seems that they still want to get out of the trap of ready-made solutions."

STEP FORWARD?

Chris Grayling, May's transport minister, told the BBC May would offer more detail, including on the Irish border, after the EU set out in a draft withdrawal agreement a backup plan that effectively would see the UK province of Northern Ireland remaining part of the EU's customs union.

That could mean that Northern Ireland would have different rules from the rest of the United Kingdom, something May said on Wednesday "no UK prime minister could ever agree to".

Challenged to come up with an alternative solution, May is expected to set out again how technology could help with any new customs procedures, and a proposal of "managed divergence" from some EU rules, a plan derided by the bloc as "pure illusion".

The speech, agreed on Thursday by her top team of ministers, themselves deeply divided on how to unravel more than 40 years of union, has been billed by aides as "a real step forward".

But the combative tone from the EU, with doubt cast even over an agreement on the relatively simpler transition period after Britain leaves in March next year, has upped the ante.

Brexit minister David Davis sent concerned Conservative lawmakers a letter repeating that Britain would not pay exit fees, the so-called divorce bill, if there was no agreement.

Some British politicians said it was impossible to settle the issue of the Irish border without first discussing the future relationship. They blamed the sequencing of the talks set up by the EU -- first to settle the divorce, then transition, and lastly to come to agreement over future trading ties.

"I think that now is the time for her to show that she (May) has got steel and that we are not prepared to put up with this any longer," David Jones, a Conservative lawmaker and former junior Brexit minister, told Reuters.

The implication that May has struggled so far to assert herself in the negotiations is echoed by the opposition Labour Party, which announced this week that it would support remaining in a customs union with the EU.

"Theresa May must now prove once and for all that she has the authority and vision to negotiate Britain's exit from the European Union," Labour's Brexit policy head Keir Starmer said in a statement. (additional reporting by Jan Strupczewski in Brussels; Editing by Peter Graff and Kevin Liffey)