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UPDATE 1-EU fears UK is rowing back on Irish border and level playing field - sources

Francesco Guarascio and Gabriela Baczynska

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BRUSSELS, Sept 5 (Reuters) - The European Union is increasingly worried about British Prime Minister Boris Johnson's stance on the Irish border and future competition rules, sources said on Thursday.

Johnson is pushing for a parliamentary election after the House of Commons blocked his bid to take Britain out of the EU on Oct.31 - with or without a divorce settlement.

He says he is making progress in talks to rework the terms that his predecessor Teresa May agreed with the EU but failed to pass at home - but European diplomats say London has yet to make any meaningful proposals.

Diplomats and officials told Reuters that EU chief negotiator Michel Barnier had told envoys from the 27 other member states in Brussels on Wednesday that London had still presented no specific ideas on how to replace the 'backstop' in May's accord - an insurance policy to keep the Irish border free of frontier checks.

Johnson has argued that, by brandishing a threat to leave the EU with no deal, he can secure concessions at a summit in Brussels on Oct. 17-18, two weeks before Britain is due to leave.

"The Brits have an unrealistic belief that everything will be miraculously solved at the summit," one EU diplomat said on Thursday.

On trade, Barnier said Johnson had made clear he was aiming at a very limited free trade agreement with the EU after Brexit.

The EU is worried, however, that London no longer wants to legally commit to a 'level playing field' - shorthand for agreed baseline competition rules relating to environmental standards, labour regulations and state aid rules - to ensure Britain would not be able to offer products in the EU at dumping prices.

"This raised a strong concern about a bare-bones free trade agreement and no level playing field," a senior EU diplomat said after the Barnier briefing. "This notion that we would end up with a Singapore-on-Thames with a 'race to the bottom' on regulations." (Reporting by Francesco Guarascio, Gabriela Baczynska and John Chalmers; Writing by Gabriela Baczynska; Editing by John Chalmers and Kevin Liffey)