U.K. toy sales grew 6 percent last year, the strongest performance in the European toy market, according to NPD Group. France, the second largest market in Europe, grew 3 percent.

“For the UK, Germany, France, Italy and Spain to show a combined growth of 3.5 percent for 2010 was a fantastic outcome and a credit to the trade for continuing to deliver innovative and exciting new products into the consumer market,” explains Frederique Tutt, industry analyst for NPD Group.

Hello Kitty ranked overall as the best European license. Toy Story appeared at the top of the U.K. chart for top licenses by revenue, while Playmobil took top spot in Germany and France. Seven of NPD’s top ten rated toy manufacturers for 2010 are active licensees.

Highlights from London Toy Fair include:

Vivid Imaginations launched plush and collectible toys based on the Moshi Monsters.

Character Options’ Character Building line of construction toys with collectable mini figure lines of HM Armed Forces and BBC’s Dr Who.

LEGO’s Ninjago showed off its growing line of licensed storage products, apparel and house wares.

Vintage, heritage and retro toys were represented by Creation’s Monty Python comedy novelties and Fisher Price toys such as the chattering telephone and teaching clock.

Zhu Zhu Pets added Zhu Zhu Babies and Zhu Zhu Puppies last year, and will incorporate Kung Zhu for boys this year.