LONDON, Oct 4 (Reuters) - Britain's financial watchdog on Wednesday urged investors who suffered losses from a fund run by one-time star stock picker Neil Woodford to accept a redress scheme or face a costly court battle likely lasting years.

Link Fund Solutions, once the authorised corporate director of the LF Woodford Equity Income Fund, has offered a redress scheme worth up to 230 million pounds ($279 million).

The fund was suspended in 2019 after struggling to meet redemption requests following months of underperformance.

The sum being offered falls short of what the FCA and investor groups had wanted.

"We think it offers the quickest and best chance to obtain a better outcome that would be available by any other means," Therese Chambers, the FCA's joint executive director for enforcement, told the watchdog's annual meeting.

"We do encourage investors to consider this proposal seriously," she said, adding that payments could start in early 2024.

The FCA is investigating the Woodford debacle and Link has said it would only accept its findings if the redress scheme goes through, otherwise they would be challenged, Chambers said.

"The matter will have to be dealt with by the Upper Tribunal or via the courts, and any litigation like that is highly complex, carries a degree of legal risk, takes time and takes money," Chambers said.

"There is an uncertain outcome that is potentially a number of years into the future."

Link said last month that it had entered into the settlement on the basis that it did not admit liability and, if the scheme was unsuccessful, it could be many years before the dispute was resolved.

Chambers said if the redress scheme goes through, the FCA would then publish the findings of its investigation into the Woodford fund, known as a final notice.

"If it does not go through, then we will have to go through our normal processes in terms of taking formal enforcement action," she said.

Mark Northway, director of ShareSoc, which represents retail investors, told Reuters he did not think the redress scheme was fair but that "it may well be the least worst outcome". (Reporting by Huw Jones and Carolyn Cohn; Editing by Alex Richardson and Elaine Hardcastle)