By Laurence Fletcher

LONDON (Reuters) - The Pensions Regulator said on Wednesday that the trustees of EMI's pension scheme had asked it to step in to adjudicate in talks with the music group's new private equity owner Terra Firma over scheme funding.

The watchdog said the scheme's trustees wrote to it earlier this month after they were unable to reach agreement with Terra Firma, which agreed to buy the world's third-largest music company and home to artists such as Lily Allen and Norah Jones for 2.4 billion pounds in May.

"Despite its best efforts over a period of months, both preceding and immediately following the takeover, the Trustees Board of the EMI Group Pension Fund has not been able to reach agreement with the new owner regarding the funding of, and security available to, the Fund," the trustees said in a letter to members dated Oct 3.

"Accordingly the Trustee has referred the matter to The Pensions Regulator who will initiate proper process for resolution under UK legislation."

The Pensions Regulator, which was formed in April 2005 to ensure firms do not walk away from their pension obligations, has the power to determine levels of contributions into under-funded schemes and the timing of those payments.

A spokesman for Terra Firma said EMI's pension scheme was in surplus under accounting rule IAS 19 as at end-August.

"The scheme is in surplus to the tune of 95 million pounds ... Terra Firma doesn't believe an increase in contributions is needed in view of the surplus. We've set out our case to the regulator," a spokesman for Terra Firma said.

However, a spokeswoman for the Pensions Regulator said the level of funding required depended on the individual scheme.