By Kylie MacLellan and William James

LONDON (Reuters) - Britain will need to boost its trade negotiating resources following its decision to leave the European Union but it is unrealistic to believe the government will have a huge budget to do so, Foreign Secretary Philip Hammond said on Thursday.

Last month's vote has exposed the lack of trade negotiating expertise in a country whose deals have been conducted for decades through the EU.

"The government will have to acquire additional trade negotiation resources ... We will look to friendly governments to assist us, as well as seeking to hire the best resources available on the open market," Hammond told a committee of lawmakers.

He said the economic and fiscal impact of Brexit in the short term would reduce government revenues, making it unlikely his department would receive a significant funding boost.

"The game of the Foreign and Commonwealth Office is going to need to be stepped up. I simply don't necessarily equate stepping up our game with doubling or trebling the budget - I think that is a wildly unrealistic aspiration," he said.

Hammond, who backed Britain remaining in the bloc, said the government's legal advice was that the decision to invoke Article 50 to formally trigger the start of Brexit negotiations was one for the prime minister rather than parliament to make.

Britain is not yet ready to do that, he added, in part because a successor to Prime Minister David Cameron will not be in place until Sept. 9.

"For the moment we are not in a position to begin substantive negotiations immediately and therefore it would be unwise to start the process ticking by triggering Article 50," he said.

Hammond also said he hoped an early agreement could be reached on reciprocal residency rights for EU citizens in Britain and Britons living in the EU.

He said that while he had not heard any EU partners say they would not agree to this, there was an "Article 50 stand off".

Other EU states saying they will not hold preliminary talks before the formal process for leaving is triggered is preventing progress being made on this and other issues, he said.

(Reporting by Kylie MacLellan and William James; editing by Stephen Addison)