LONDON, Sept 19, 2007 (AFP) - While the British fashion industry seems in fine creative fettle, many insiders say it needs to smarten up its act on the business side to compete on the international catwalks.

Photographers work during Christopher Kane's show at London Fashion Week in the West End area of London - Photo : Leon Neal/AFP

The country's chic elite have been on display at London Fashion Week, where the return of some long-absent designers has been welcomed by many.

But critics warn that a few big names alone are not enough to push it into the superleague of countries like France and Italy.

"Good, but can do better" was the verdict of Baroness Denise Kingsmill, presenting a report on the health of models which also looked at the business side.

"We were shocked about the diversity of this industry. It should be more efficient. It's not making the contribution to the British economy that it should."

Her views are shared by Stuart Rose, the chief executive of department store Marks and Spencer and president of the British Fashion Council (BFC), which organises London Fashion Week, since 2004.

"The difference between London Fashion Week and how things are done in France or Italy is that the French and Italians understand fashion is serious -- it's an industry," he told the Guardian newspaper.

"In London, there is the air of fashion being something for gifted amateurs. I fully respect the creative freedom of designers but...fashion is a business".

He also noted, though, that "London is on the rise".

According to the inquiry led by Kingsmill, the British designer fashion industry was worth 1.8 billion pounds (2.6 billion euros, 3.6 billion dollars) in 2004.

Fashion more generally -- apparel, footwear and textiles -- generates around 10 billion pounds a year and employs 380,000 people.

"The potential is huge," the report said.

The London Development Agency has designated designer fashion as one of the specialist sectors with the biggest potential for growth -- it has seen four percent annual growth in the last ten years.

And between 1990 and 2001, designer fashion turnover has leapt almost tenfold from 75 million to 700 million pounds.

One of the key elements in this success has been the trend for big names like Stella McCartney designing collections for high street brands such as Topshop and H&M.

This resurgence is due to the talents of stars of the fashion world such as Alexander McQueen, John Galliano, Julien Macdonald, Stella McCartney, Clements Ribeiro and Luella Bartley.

The next generation, featuring designers like Gareth Pugh, is also full of promise.

"The British fashion industry is unique. The focus of the LFW is really on young designers, it's a new creator launching pad," Hilary Alexander, fashion director of the Daily Telegraph newspaper, told AFP.

"It would be a mistake for London to become like the other big fashion centres.

"In London, designers are not afraid to take risks. They're so unpredictable."

The problem is that once British stars become internationally successful, they head for bigger fashion centres such as Paris and New York.

But London Fashion Week this time round seems to have proved the exception -- Luella has come back to the event after six years' absence, while Matthew Williamson is also back after several years.

Stella McCartney, meanwhile, is showing her collection for Adidas in what will be her first show at London Fashion Week, which ends Thursday.

"We are going to see the most fantastic show ever," said Hilary Riva, director-general of the BFC.

Perhaps this is why Anna Wintour, the legendary editor of American Vogue magazine and inspiration behind the bestselling novel "The Devil Wears Prada" has snubbed Paris to come to London this season.

By Elodie Mazein