By Rachel Sanderson and Cindy Martin

LONDON (Reuters) - London celebrated the opening weekend of its fashion week with greater fanfare and more international influence than ever filling its runways with spectacle and its front rows with stars.

After languishing behind Paris, Milan and New York for several years, a clutch of new designers and London's emergence as a top shopping and financial destination have returned it to fashion's zenith for the spring-summer 2008 shows.

While supermodels Naomi Campbell and Claudia Schiffer took centre stage at a champagne-filled party in Holland Park, Dame Shirley Bassey, U.S. actress Tara Reid and Joan Collins took to the front row of the shows.

"A lot of people have said to me it's the best London fashion week in 10 years. And you can't do better than that," Hilary Riva, chief executive of the British Fashion Council that organises fashion week, told Reuters.

Gareth Pugh, one of the most eagerly awaited designers of the week, upheld London's reputation as the crucible of the cutting-edge opening his show on Sunday with a huge red balloon which popped revealing a model with a cube for a head.

He later sent another down the catwalk in a shawl made of mice in a show filled with gothic-influenced leather suits.

At Julien Macdonald, whose evening gowns are red carpet favourites, the dominant theme was racing stripes and biker shorts under flirty skirts.

With luxury sportswear one of the fastest-growing areas in the high fashion industry, Macdonald said it was a look inspired by Britain's hosting of the 2012 Olympics.

BALLOON ART

Spectacle also filled London's night sky when 1,000 helium balloons lit by flickering LED lights rippled above the city in an art installation by Usman Haque sponsored by champagne house Moet & Chandon as a celebration of fashion week.

At the party that followed, supermodel Erin O'Connor and British Fashion Council Chairman Stuart Rose, who is also chief executive of retailer Marks & Spencer, took turns on a carousel set up in the grounds of Holland Park's opera house.

Designer Giles Deacon provided the music, deejaying on a table piled high with blood-red pomegranates and champagne.

"A decade ago there was a difference between London, and Paris, Milan and New York. You can't say that anymore," English socialite and TV personality Tara Palmer-Tompkinson, dressed in Givenchy haute couture, said at the party.

London's fashion revival is part of a resurgence shared in its art, music, literature, cuisine and club land that has gone hand in hand with its emergence as an international financial capital and playground for the world's wealthy.

Other signs of London Fashion Week's new power are designers Luella and Matthew Williamson's decision to switch to showing here this week instead of New York and U.S. Vogue editor Anna Wintour's return after shunning London for several seasons.

Another highlight is Tuesday's gala opening of the Victoria & Albert Museum's "The Golden Age of Couture: Paris and London 1947-1957" which is expected to lure A-list guests.

The six-day event will close with another British emigre designer, Stella McCartney, who usually shows in Paris but will unveil her sportswear collection with Adidas on Thursday.