FTSE up 1.3% as banks rise again on Fannie, Freddie

* FTSE gains 1.3 percent

* Banks gain as Fannie, Freddie news still helps sentiment

* Miners weighed by falling metals prices

By Simon Falush

LONDON, Sept 9 (Reuters) - Britain's top share index gained 1.3 percent early on Tuesday, adding to sharp gains in the previous session driven by the U.S. government's plan to take control of mortgage lenders Fannie Mae and Freddie Mac.

By 0812 GMT the FTSE 100 .FTSE was up 70.3 points at 5,516.9, after closing up 205.6 points, or 3.9 percent, at 5,446.3 on Monday.

However, dealing on the London Stock Exchange was halted for several hours on Monday, meaning that activity on Tuesday could be an overhang from trades investors were unable to complete in the previous session.

Monday's gains were largely driven by surging banks after confidence in the sector was boosted as Washington took control of mortgage finance companies Fannie Mae and Freddie Mac to support the ailing U.S. housing market.

"Overall the market is coming to terms with what the takeover of Fannie and Freddie means," said Keith Bowman, equity analyst at stockbrokers Hargreaves Lansdown.

"Yesterday the market saw it as positive, now it's taking a step back and looking at what the downsides might be ... and there's a recognition that the recovery process will be a lengthy one."

The Times quoted senior British government sources as saying finance minister Alistair Darling is preparing to intervene to stimulate Britain's dormant housing finance market, a move that could also shore up confidence in the banking sector.

After gaining sharply in the previous session, banks were again in positive territory.

Barclays , Royal Bank of Scotland , HSBC , HBOS , Lloyds TSB and Standard Chartered rose between 1.9 and 5.8 percent.

MINERS WEIGH

Miners were the biggest losers as concerns about global growth and a strong dollar saw gold and other precious metals prices fall.

Lower metal prices also boosted mining stocks, with BHP Billiton , Rio Tinto , Anglo American , Xstrata and Eurasian Natural Resources down between 0.5 and 2.9 percent.

In the energy sector BG Group rose 1.1 percent after it admitted defeat in its hostile takeover bid for Australian utility and gas fields owner Origin Energy after Origin formed a joint venture with U.S. oil major ConocoPhillips .

Tullow Oil rose 0.8 percent after it said it had found oil at the Kigogole-1 Well in Uganda.

Other energy stocks were supported by crude prices stabilising above $105 per barrel CLc1. Royal Dutch Shell RDSa was up 0.3 percent, BP up 0.8 percent.

AstraZeneca rose 1.9 percent after Credit Suisse raised its price target on the drugmaker.

However, Shire lost 2.1 percent after Goldman Sachs cut it to "neutral" from "buy".

In the mid-cap FTSE 250 .FTMC, Qinetiq fell 7.9 percent after the UK government said it wanted to sell an 18.9 percent stake in the company. (Editing by Will Waterman)