* UK's Osborne to host two-day meeting of finance ministers
* Central bank action to boost world economy high on agenda
* Bank regulation and tax avoidance also up for discussion
* Some officials question point of meeting just after IMF
Many of the world's most powerful finance chiefs will meet at an English stately home later on Friday to discuss if central banks can do more to bolster a fragile global recovery.
The finance ministers and central bank governors from the Group of Seven industrialised economies look unlikely to break new ground on fixing the weak world economy, as a meeting at the International Monetary Fund took place just three weeks ago.
But Britain's finance minister George Osborne, who chairs the talks, is keen for his peers to focus on what more central banks can do to help growth at a time when most governments are trying to cut spending and raise taxes.
"(This is) an opportunity to consider what more monetary activism can do to support the recovery, while ensuring medium-term inflation expectations remain anchored," Osborne said.
Central banks have ramped up their actions in recent weeks, helping to propel a share price rally in many countries. The European Central Bank cut interest rates and may boost small business lending. The Bank of Japan turned much more aggressive to shock its economy back to growth. And the U.S. Federal Reserve is also continuing its bond purchase programme.
While the Bank of England kept its policy on hold on Thursday, it has recently expanded a credit scheme. Moreover, Osborne has tasked the next BoE governor, Canadian central bank chief Mark Carney, with finding new ways to boost growth when he succeeds Mervyn King in July.
Britain's finance ministry said the talks over Friday and Saturday at a 17th-century country house 40 miles northwest of London were also likely to focus on bank regulation, tax avoidance and free trade.
The emergency rescue of Cyprus in March acted as a reminder of the need to finish an overhaul of the banking sector, five years after the financial crisis began.
As at last month's IMF meeting, Germany may come under renewed pressure to give more support to a banking union in the euro zone. The plan could help strengthen the single currency area, but Berlin worries it may pay too much for future bank bailouts.
While the first step - to create a single bank supervisor under the ECB - looks set to be in place by mid-2014, a second pillar, a 'resolution' agency and fund to close failed banks, is in doubt. And there is little prospect that a third leg, a single deposit guarantee scheme, will ever see the light of day.
But Osborne will nonetheless push his fellow G7 ministers to set up mechanisms to shut down failing banks, which would otherwise be considered "too big to fail".
Some of the officials said they did not know why Britain, which is chairing the G7, had called the meeting so soon after the IMF discussions.
But Osborne said there was value in talks that were more informal than larger meetings of the world's major economies which form the Group of 20.
Canada's finance minister, Jim Flaherty, told Reuters he welcomed the chance for a relaxed "fireside chat" atmosphere to hammer out differences. "We can be forthright with each other and try to move the puck down the ice, as we say," he said.
The G7 - the United States, Germany, Japan, Britain, Italy, France and Canada - lost its mantle as the main forum for thrashing out differences over the global economy in 2009 when responsibility was passed to the G20.
A U.S. official said Washington would keep up its calls on Europe to boost demand and maintain its focus on Japan's aggressive monetary policy, which has raised U.S. concerns about a weakening of the yen.
But Canada's Flaherty said he regretted that countries were easing back on austerity. "I think the resolve has weakened, and I think it's mistaken," he said. "I would like to achieve a consensus that we need to do both ... fiscal consolidation and economic growth incentives."
No communique and no formal decisions are expected at the meeting, which will help prepare the way for a G20 leaders' summit in Russia in September.
It comes at a relatively good time for its host, UK finance minister George Osborne. He will be able to point to a few signs of life in Britain's stagnant economy that have taken some of the heat out of criticism of his austerity policies.
The meeting will also be a chance for the G7 to get to know new members of the group - such as the finance ministers of the United States and Italy - and to bid farewell to Mervyn King, who retires from the Bank of England in June.