UPDATE 1-DMGT considering closure of "London Lite" paper

* Says reviewing future of London freesheet

* News Corp's UK arm closed rival thelondonpaper in Sept

LONDON, Oct 27 (Reuters) - The London Lite free evening newspaper may close down, its publisher said on Tuesday, the latest victim in a ferocious battle for the capital's commuters.

The paper, owned by Daily Mail and General Trust (DMGOa.L), was launched three years ago to take on Rupert Murdoch's (NWSA.O) freesheet thelondonpaper and DMGT's own paid-for Evening Standard.

Both companies were ravaged by the slump in advertising and the londonpaper closed in August with pretax losses of 13 million pounds ($21 million).

DMGT sold its majority stake in the Evening Standard earlier this year and it was relaunched as a free title earlier this month by Russian billionaire owner Alexander Lebedev.

At the height of the circulation war, distributors would daily thrust a combined 900,000 copies of the freesheets at commuters and tourists.

Coverage was focused on London news, sport and celebrity culture.

Lebedev lifted circulation of the Evening Standard to over 600,000 from 250,000 when it went free on Oct. 12, putting further pressure on London Lite.

DMGT, whose shares were 1.9 percent higher at 423.4 pence by 1341 GMT, said in a statement it had "entered into a period of consultation over the future of London Lite...which may result in closure."

(Reporting by Paul Sandle; Editing by David Cowell)