UPDATE 1-Iceland Foods to be put up for sale

* Landsbanki committee to start looking for sale advisers

* Founder and CEO Walker still interested in leading a bid (Recasts with confirmation, Iceland comment, background)

LONDON Jan 28 (Reuters) - British frozen food chain Iceland Foods [ICFDG.UL] is to be put up for sale by its majority owner for over 1 billion pounds ($1.6 billion).

The Resolution Committee of Landsbanki [LDBSD.UL], the failed Icelandic bank, said on Friday it would start looking for advisers to sell its 67 percent stake in the business.

"We are at the very beginning of the process," said Landsbanki spokesman Pall Benediktsson, adding it was not certain a sale would go ahead or, if it did, that a deal would be completed this year.

A spokesman for Malcolm Walker, the founder and chief executive of Iceland, reiterated he would be interested in leading a bid for the chain, but was unaware of any sale plans.

Walker and other managers own about 24 percent of Iceland.

They made a proposal to buy the business for about 1 billion pounds in the autumn, but that was rejected by Landsbanki, a source familiar with the matter said.

Benediktsson said the resolution committee, which controls the assets of Landsbanki, had no current plans to sell any of its other British retail assets, which include a 65 percent stake in toy store Hamleys, 66 percent of jewellery group Aurum and 35 percent of department store group House of Fraser. (Reporting by Karolina Tagaris and Mark Potter; Editing by Bernard Orr and Hans Peters) ($1 = 0.6304 pound)