LONDON, Feb 29 (Reuters) - Barclays' former CEO John Varley should be forced to give evidence at the British bank's appeal against a 50 million pound ($63 million) fine over undisclosed fees to Qatari entities, lawyers for Britain's financial watchdog said on Thursday.

In the latest courtroom battle focusing on how Barclays avoided a state bailout during the 2008-9 credit crisis by tapping deep-pocketed Gulf investors, the Financial Conduct Authority (FCA) is pursuing a fine it first proposed in 2013.

The case turns on how Barclays communicated with the market about a two-part, 11 billion pound emergency fundraising in June and October 2008 and "advisory service agreements" struck with gas and oil-rich Qatar that totalled 322 million pounds.

Barclays, which denies allegations of wrongdoing, is bringing an appeal against the fine at the Upper Tribunal in London, arguing that it took reasonable care to not make any misleading announcements to the market.

The bank says it acted on the advice of lawyers, that its decisions on what to disclose to the market were in line with corporate practice, and that Qatari fees were not material and not connected to the 2008 fundraising.

The appeal turns the spotlight back onto Barclays' strategy 15 years ago, and four years after three top executives were cleared of fraud charges. Varley was acquitted in 2019 after senior judges said there was insufficient evidence against him.

At a preliminary hearing on Thursday, the FCA and Barclays argued over whether Varley, Barclays' CEO at the time of the fundraising, should be forced to give evidence.

A lawyer for Varley, who is not a party to the Upper Tribunal case, did not immediately respond to a request for comment.

The FCA in 2013 proposed fining Varley 1 million pounds and banning him from financial services for allegedly acting recklessly and without integrity, but dropped the case after the end of the criminal proceedings, the FCA's lawyers said in court filings.

Paul Stanley, representing the FCA, said in court filings Varley should be summonsed by the tribunal to give evidence.

He argued in the filings that Barclays, not the FCA, should seek to summons Varley as the FCA considers he is not a truthful witness.

Stanley said there were "serious doubts about the accuracy, reliability, and truthfulness" of accounts Varley had given to the FCA, to the Serious Fraud Office – which unsuccessfully prosecuted Varley and Barclays – and in a civil lawsuit brought by British buinesswoman Amanda Staveley's private equity firm.

But Barclays' lawyers said it would be unfair to compel Varley to give evidence after the FCA told him in 2020 that it would not continue its case against him personally.

Judge Rupert Jones is expected to give a ruling at a later date. (Reporting by Sam Tobin and Kirstin Ridley; Editing by Jan Harvey)