LONDON (Reuters) - The British economy has performed less strongly than expected and a crisis in the euro zone will constrain growth for several years, finance minister George Osborne said in a budget update to parliament on Wednesday.

The economy will grow 1.2 percent next year and 2.0 percent in 2014, according to revised projections from the Office for Budget Responsibility, Osborne said. 2015 and 2016 forecasts were revised down to 2.3 and 2.7 percent respectively.

In March, the government's forecasting body said the economy was set to grow 2.0 percent next year, and accelerate to 2.7 percent in 2014, and to 3.0 percent in the following two years.

A Reuters poll taken last month predicted growth of 1.1 percent next year and 1.7 percent in 2014.

"It's taking time, but the British economy is healing," Osborne said.

Britain may have escaped its second recession in four years last quarter but growth is seen marginal at best in the next 12 months. However, a slew of recent data has put the current quarter's meager expansion expectation in danger.

Figures published this week have made grim reading for Osborne and have pointed to a possible flat fourth quarter.

The euro zone's economic slump was a little less pronounced in November than previously thought, although there are few signs the region will emerge from recession any time soon, business surveys showed on Wednesday.

(Reporting by Jonathan Cable Editing by Maria Golovnina)