UK's Labour rallies pro-EU troops as Sun shines on Brexit campaign

By Michael Holden and Kylie MacLellan LONDON (Reuters) - The leader of Britain's main opposition party urged supporters on Tuesday to vote to remain in the European Union after opinion polls showed gains for those wanting to leave and the nation's biggest-selling paper backed Brexit. The "In" camp led by Prime Minister David Cameron, whose own Conservatives are deeply split over the EU, has recently given the lead role in campaigning to the left-leaning Labour Party, whose supporters could decide the June 23 referendum. In a campaign dominated by concerns over immigration and the economy, both sides have stepped up their arguments before the closely contested vote that will help determine Britain's future in trade and world affairs but also shape the EU itself. Sterling slipped to a two-month low on Tuesday and the euro has also lost value on fears a British exit from Europe, or Brexit, would tip the 28-member bloc back into recession. Labour leader Jeremy Corbyn, flanked by the party's top lawmakers and trade union members, said a vote to stay in the EU would protect workers' rights - pitching to voters who "In" campaigners fear have been turned off by a debate dominated by rivalries in the ruling Conservative Party. "This is the Labour movement saying we are voting to remain in the European Union next week," he said at the headquarters of the Trades Union Congress (TUC) which groups 51 unions representing almost 6 million of the United Kingdom's 65 million people. A TNS poll emphasised the battle facing Corbyn and other "In" campaigners. Just nine days before the referendum, it showed the Leave camp holding a lead of seven percentage points, matching a YouGov survey overnight. Criticized by some campaigners for being lukewarm in his support to remain in the EU, Corbyn was clear he was leading his party's push to stay but kept his distance from Cameron's mantra that Britain is "stronger, safer and better off" in the bloc. In a later speech, he attacked the Conservatives for damaging Britain's public health service (NHS) - where he had represented staff before becoming a lawmaker. But he told voters those who wanted to leave would "put the NHS in jeopardy". The general secretary of the TUC, Frances O'Grady, and other union leaders published an open letter earlier on Tuesday underlining their fears that Britain would vote to leave the EU, something they described as "a disaster for working people". The "Remain" camp played down any connection between the spotlight on the Labour message and the slide in the opinion polls - several of which put the "Leave" campaign ahead - saying there had been no change in strategy or message. "We're concentrating on getting our message across up and down the country," said a spokesman. "We're particularly concentrating on Labour voters and demonstrating to them that their party is unequivocally on the side of remain." POLLS TURN Polls over the last four days have suggested that the "Leave" camp is gaining, although there are many undecided voters. Bookmakers have also been slashing the odds on Brexit, unsettling investors. The pound fell below $1.41 for the first time in two months and London-listed shares fell nearly two percent on Brexit worries. In another, though not unexpected, boost for the "Leave" campaign, media tycoon Rupert Murdoch's Sun newspaper called on its readers to vote to quit the EU. "The Sun urges everyone to vote Leave. We must set ourselves free from dictatorial Brussels," said the tabloid, which has a circulation of 1.7 million but may be preaching to the converted as many of its readers already back a Brexit according to polls. In an article for the London Evening Standard in February, veteran journalist Anthony Hilton said he once asked Murdoch why he was so opposed to the European Union. "'That's easy,' he replied. 'When I go into Downing Street they do what I say; when I go to Brussels they take no notice.'" But at a 2012 public inquiry into the press, Murdoch rejected suggestions he had influence over British politicians and in a world of declining sales and growing new media, the stance taken by the media may matter less than it once did. MONEY The Sun newspaper does, however, reach many of Labour's traditional working-class supporters, some of whom have been won over by arguments that Britain needs to control immigration to reduce pressure on the health service, schools and housing. While those wanting to stay in the EU can count on the support of many of Britain's biggest businesses, most economists and foreign leaders such as U.S. President Barack Obama, fears about uncontrolled immigration from Europe and the impact on jobs and services is proving key for the "Out" campaign. In an open letter, 13 government ministers and senior Conservatives said in the event of Brexit "there is more than enough money to ensure that those who now get funding from the EU - including universities, scientists, family farmers, regional funds, cultural organizations and others - will continue to do so". They also said there would be also be money saved to spend on priorities. The "Remain" campaign said it was "fantasy economics". (Writing by Michael Holden and Elizabeth Piper; Additional reporting by James Davey and Andy Bruce; Editing by Philippa Fletcher and Pravin Char)