LONDON, Aug 1 (Reuters) - Britain on Tuesday said it would retain the European 'CE' safety mark for products indefinitely rather than scrap it following the country's departure from the European Union, in a move welcomed by businesses as a pragmatic step.

The British government had touted Brexit as an opportunity to ditch burdensome EU regulations on businesses but it has since dialled back some of those plans after companies complained they would face increased costs and bureaucracy, hitting their ability to compete.

One proposal included the introduction of a UKCA mark to replace the European scheme that shows products meet safety, health, and environmental protection requirements. The government said on Tuesday businesses would now be able to choose which scheme to use when selling products in Britain.

"The government is tackling red tape, cutting burdens for business, and creating certainty for firms – we have listened to industry, and we are taking action to deliver," business minister Kevin Hollinrake said.

"By extending CE marking use across the UK, firms can focus their time and money on creating jobs and growing the economy."

Earlier this year the government scrapped another post-Brexit plan, saying it would no longer remove all EU laws by the end of this year.

British companies had complained that a UKCA certification would lead to extra costs because it was not recognised by Brussels, which has far greater regulatory sway in the world, diminishing its relevance outside of Britain.

Some British companies that export to Europe have moved operations into the EU in part so they can access the bloc's CE certification scheme - a marking that can be desired by buyers of goods outside of Europe.

The British Chambers of Commerce welcomed the indefinite retention of the CE mark, saying that a 2021 survey found only 8% of businesses had wanted to ditch the EU marking system and 59% of companies impacted by the decision wanted to keep it.

Stephen Phipson, the head of manufacturing industry group Make UK, said it would "safeguard the competitiveness of manufacturers and aid the UK as a destination for investment". (Reporting by Alistair Smout and Andy Bruce; Editing by Susan Fenton)