UPDATE 3-France dismisses EDF call for 20 pct tariff hike

* Lagarde says govt not bound by EDF request

* EDF head asked for 20 pct increase over three years

* Lagarde calls for some tariff hikes, productivity gains

* French power and gas tariffs are set by the government

(Adds comment from government statement)

PARIS, July 9 (Reuters) - French Economy Minister Christine Lagarde on Thursday rebuffed calls by EDF (EDF.PA) Chief Executive Pierre Gadonneix for a 20 percent increase in French state-set electricity tariffs.

"The government is absolutely not bound to the assessment made by Mr Gadonneix. This is an issue that (Industry Minister) Christian Estrosi and I will review later," Lagarde told reporters on a trip to Hallencourt in northern France.

But she said some tariff increases and productivity gains were necessary to help EDF finance its investments.

French electricity tariffs are between 15 and 30 percent cheaper than in neighbouring European countries, Lagarde later told members of parliament, adding French consumers should continue to benefit from low nuclear-derived prices.

Nuclear power is cheaper to produce than other electricity sources despite high initial investments but EDF has heavy investments planned to maintain its reactors.

"Investments are necessary ... How do we finance those investments? Of course by raising tariffs, we will have to come to terms with that, but even more so, and I think this is a priority for EDF's management, by productivity gains within the company," she told a parliamentary hearing.

"Those productivity gains will not necessarily imply job cuts," she added.

She said later in a joint ministry statement that price hikes would have to take account of the "fragile situation of many households and businesses in the current economic context" and would therefore not rise "too rapidly".

Gadonneix sought a price hike in French media interviews on Thursday and said EDF would have to slash investment if a 20-percent rise did not materialise over the next three years.

He told newspaper La Tribune that French power tariffs would now be 40 percent higher if the state-owned group had been able to pass on the cost of inflation over the past 25 years.

EDF has plans to invest 7.5 billion euros in France in 2009 alone. On Monday, it closed an offer for a retail bond, which reportedly raised nearly 3 billion euros, and the group has been active in the debt market in recent weeks.

The group's debt stood at 24.5 billion euros at the end of 2008, up from 16.3 billion a year earlier following the acquisition of British Energy. (Reporting by Clement Guillou, Marie Maitre and Muriel Boselli; Editing by David Holmes and Jon Loades-Carter)