By Anjuli Davies and Kylie MacLellan

LONDON (Reuters) - British Prime Minister Theresa May sought to reassure City executives at a private gathering hosted by Wall Street bank Morgan Stanley <MS.N> that she would seek the right deal for the financial services industry in upcoming Brexit negotiations.

London's future as Europe's financial center is one of the biggest issues in Brexit talks because it is Britain's largest export sector and biggest source of corporate tax revenue.

At an event on Wednesday evening at the British Museum to celebrate Morgan Stanley's 40 year anniversary in Britain, May addressed some of the country's top CEOs and senior executives who are concerned about the loss of access to the single market once Britain leaves the European Union.


"The prime minister was attending a reception at the British museum marking 40 years of Morgan Stanley in the UK and she delivered a few brief remarks," a spokesman for May's office said.

"The prime minister has made clear along that the UK is seeking the right deal for financial services as Britain leaves the EU and she made that point to the audience."

May attended the cocktail and canape reception for about 45 minutes, mingling with guests after giving her brief remarks, according to once source who was present.

Businesses have been calling for clarity on what Britain's relationship with Europe will be before deciding how to reshape their operations, but most major firms are now set to relocate some business to ensure they can still trade with Europe after May said in January that the country will quit the EU single market.

May faces an uphill struggle to persuade financial institutions not to shift some operations given Britain's exit from the single market almost certainly means banks will lose "passporting" rights which enable them to sell products across the EU from their European hubs in London.

Some European countries also see Brexit as an opportunity to challenge British dominance of finance after decades and to lure financial firms and their staff to the continent.

Morgan Stanley, whose CEO James Gorman attended the British Museum event, bases the bulk of its European staff in Britain and may have to move up to 1,000 jobs in sales and trading, risk management, legal and compliance, as well as slimming the back office in favor of locations overseas, a source involved in the process told Reuters in January.

(Editing by Angus MacSwan)

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