(Corrects SEPT 2 story to clarify affiliation of AbdulMagid Breish, paragraph 6)

LONDON, Sept 2 (Reuters) - A row between Libya's two rival governments over control of the $67 billion Libyan Investment Authority, the country's sovereign wealth fund, has escalated with one of the would-be chairmen asking a London court to settle the dispute.

Libya is torn between two governments, one based in Tripoli and the second in the east of the country, which have appointed different heads of various institutions, including the LIA, part of the chaos four years after the ousting of Muammar Gaddafi.

Hassan Bouhadi, LIA chairman from the internationally recognised government based in eastern Libya, said he had initiated proceedings in the London Commercial Court to determine who has the authority to appoint a board of directors to manage the fund's UK-based assets.

Bouhadi said in a statement that clarity over control of the fund "must be laid to rest as soon as is practically possible," and that an application is likely to be heard in the English courts early next year.

Bouhadi's Tripoli-based rival, AbdulMagid Breish, once the undisputed chairman of the fund who says he was reinstated by a Libyan court after temporarily stepping aside amid a legal challenge, said he was "disappointed" by the move, and said it was "contrary to the spirit of the U.N. process" currently underway between Libya's rival rulers.

Breish, although based in Tripoli, is not aligned with either government.

Part of the LIA's foreign assets were frozen by Western countries and the U.N. during the 2011 uprising to prevent Gaddafi officials getting access to funds or as part of investigations into corruption.

The U.N. is planning a new round of talks this week in Geneva to persuade the warring factions to form a national unity government as a way out of Libya's crisis. ID:nL5N1133FH

(Reporting by Libby George; Editing by Ulf Laessing and David Evans) ((ulf.laessing@thomsonreuters.com; follow me on twitter @ulflaessing; Tripoli newsroom; Reuters Messaging: ulf.laessing.reuters.com@reuters.net))

Keywords: LIBYA FUND/