UPDATE 1-Cattles says will not pay bond coupon

* To provide further update "shortly"

* In "constructive discussions" with creditors (Adds detail)

LONDON, July 6 (Reuters) - Troubled British sub-prime lender Cattles (CTT.L) on Monday said it would not make a bond interest payment originally scheduled for July 5, as talks over its bank debt approach a key deadline.

Cattles, whose shares were suspended in April, added that it was still in "constructive discussions" with its creditors, and that it would issue a further statement "shortly."

The company, hit by accounting problems which led it to underestimate its bad debts by about 700 million pounds ($1.14 billion), is hoping to negotiate a standstill agreement on a 500 million pound bank loan that expires on Thursday.

Cattles also has 400 million pounds of bondholder debt maturing in 2017.

The lender, dependent on expensive wholesale funding, earlier this year failed to obtain a banking licence which would have allowed it to finance itself more cheaply through retail savings deposits.

Cattles, which lends at higher-than-average rates of interest to people who could not get credit from mainstream banks, closed its doors to new customers earlier this year in order to conserve cash. ($1=.6147 Pound) (Reporting by Myles Neligan; editing by Simon Jessop)