LONDON (Reuters) - Britain's healthcare cost watchdog has had second thoughts about using Amgen's new bone drug Xgeva, or denosumab, and now says it does not believe it should be offered on the state health service to prostate cancer patients.

The National Institute for Health and Clinical Excellence (NICE) had in March recommended the drug for breast and prostate cancer patients whose disease has spread to the bone.

But in light of fresh information from clinical experts, the agency said on Tuesday it no longer believed Xgeva represented a cost-effective choice in treating prostate cancer.

The decision is due to revised thinking on the appropriate comparator treatments for Xgeva, which is an alternative to older bone-strengthening bisphosphonate drugs.

Expert evidence showed that while bisphosphonates helped prevent bone damage in breast cancer, they were mainly used for pain relief in prostate cancer, a NICE spokeswoman said.

The latest version of NICE's draft guidance is now open for comment.

(Reporting by Ben Hirschler; Editing by David Hulmes)