UPDATE 1-Mr BRICS quits UK Treasury post after reported row over China

(Adds details, background)

LONDON, Sept 23 (Reuters) - Former Goldman Sachs chief economist Jim O'Neill resigned from Britain's finance ministry on Friday after he reportedly clashed with new Prime Minister Theresa May over Chinese investment in the country.

O'Neill, who coined the BRICS acronym to group the world's largest emerging economies while at Goldman Sachs, worked in the Treasury as a junior minister overseeing infrastructure policy and promoting Britain as a source of foreign direct investment.

The Financial Times said in July that O'Neill could quit his post over May's approach to Chinese investment which appeared less welcoming than that of her predecessor David Cameron.

Shortly after becoming prime minister, May ordered a last-minute review into an 18 billion-pound nuclear power plant project at Hinkley Point which was backed by Chinese funding. The project was given the green light earlier this month but the review alarmed officials in China.

One of the areas that Manchester-born O'Neill worked on was the Northern Powerhouse project to improve infrastructure in northern England and which aimed to attract investment from China.

In his resignation letter to May, O'Neill said the case for the project was even stronger after June's decision by voters to leave the European Union, and he was pleased that "despite speculation to the contrary" it appeared to be "commanding your personal attention."

In her reply, May thanked O'Neill for his work on the Northern Powerhouse and on promoting stronger economic links with emerging economies, including China and India. "You have laid important foundations in these areas, and the Government will build on them," she said.

O'Neill also led a push by Britain's government to encourage the development of new drugs against drug-resistant infections. (Writing by William Schomberg; editing by Stephen Addison)

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