UPDATE 1-UK lawmaker calls on Woodford to waive fees in suspended fund

* Nicky Morgan calls on Woodford to stop charging

* Follows similar call from Hargreaves Lansdown

* Woodford yet to respond to Morgan

* Hargreaves says Woodford not looking to cut fees (Adds comment from Hargreaves Lansdown)

By Simon Jessop, Carolyn Cohn and Huw Jones

LONDON, June 6 (Reuters) - A senior British lawmaker joined calls on Thursday for embattled money manager Neil Woodford to stop charging fees on a fund he has stopped people from leaving.

Woodford Investment Management suspended trading in its 3.7 billion pound ($4.71 billion) Equity Income Fund on Monday after an increase in client demands to take back their money.

One of its major backers, fund supermarket Hargreaves Lansdown, whose shares have fallen 16% this week, said on Wednesday it would waive its fee while the fund was suspended, and put pressure on Woodford to do the same.

Nicky Morgan, chair of parliament's Treasury Select Committee, added to calls for a fee cut.

"Investors in the Woodford Fund have been locked out of accessing their cash. Yet it has been reported that Mr Woodford is taking in nearly 100,000 pounds in management fees a day," Morgan said.

"The suspension of trading has provided Mr Woodford with some breathing room to fix his fund. He should afford his investors the same space and waive the fund's fees while the fund is suspended."

Woodford's Income Fund charges investors between 0.65% and 1.5% of their total assets per year as a management fee, the fund factsheet shows. A fee of 1% equates to 37 million pounds a year or 101,000 pounds a day.

TROUBLING EPISODE

The Treasury Committee will raise this "troubling episode" when it next takes evidence from the Financial Conduct Authority and the Bank of England, Morgan said.

Pressure on Woodford is mounting following a decision this week by wealth manager St James's Place to take back 3.5 billion pounds in assets, and as the financial markets regulator stepped up scrutiny of the fund.

A Woodford spokesman was not immediately available for comment when contacted by Reuters, but Hargreaves Lansdown said its last communication with the fund manager suggested no plans to change.

"We are in regular contact with Woodford and, so far, the communication we've received on the fund position is that they are not looking to cut their fee," Head of Investment Analysis Emma Wall told Reuters.

Hargreaves Lansdown has been a strong supporter of Woodford through the inclusion of his Income Fund on its 'Wealth 50' list of favourite funds - an honour only rescinded on Monday.

While an unspecified number of Hargreaves' retail clients could have invested directly through its platform, the suspended fund also featured in several of its fund-of-fund products, which take stakes in a number of underlying funds.

Wall said the suspended fund accounted for only a small part - around 6.4% - of the total assets in its 10-strong 'multi-manager' range of funds.

However, Woodford's Income Fund was the fourth-biggest holding in Hargreaves' largest multi-manager fund, the 2.9 billion pound Income and Growth fund, with a 14% stake, according to the fund's factsheet on Hargreaves' website.

"Like any investor in Woodford, we are concerned by recent events. We do not see any reason why this should impact our liquidity," Wall said.

($1 = 0.7859 pounds) (Editing by Jan Harvey)