By Paul Sandle

LONDON (Reuters) - British business secretary Jonathan Reynolds on Thursday demanded the country's competition watchdog be "more agile" and "less risk averse," pushing the regulator to better align with the government's growth agenda.

Outlining new guidance for the Competition and Markets Authority (CMA), Reynolds asked the watchdog to be more responsive to the needs of businesses.

"Our strategic steer asks CMA to minimize uncertainty for business by being proactive, transparent, timely, predictable and responsive in its engagement," he told executives in London.

Since taking power last year, the Labour government has stepped up pressure on regulators, demanding they play their part in tearing down barriers that hold back growth.

A lighter regulatory touch is a shift in a country that has been unafraid to take on big companies to protect the interests of smaller firms and consumers.

Last month the government forced out the chair of the regulator after he failed to prioritise its growth agenda, replacing him with a former Amazon boss.

Reynolds said the changes aimed to balance consumer protection and competition law to create a level playing field.

He added the regulator was already taking "great steps" in adopting a new approach, citing its approval of the Vodafone UK-Three mobile merger as a "fantastic example".

The CMA, which recently received new powers to better scrutinise big tech, said it would cut the time it spent looking into mergers before deciding whether or not to intervene.

"We know speed of decision making is vital to reduce uncertainty and costs for businesses," it said.

By June, the watchdog plans to complete the "pre-notification" stage of merger inquiries within 40 working days, down from an average of 65, and to reduce the target to assess straightforward cases from 35 working days to 25.

The changes would "require a major streamlining of our approach" but were achievable, it said.

(Reporting by Paul Sandle and Muvija M; editing by Sarah Young and Christina Fincher)