UPADATE 1: UK prosecutors expect to conclude Barclays Qatar probe by year-end

* SFO expects to reach decision on charges early 2017 

* Barclays drops plans to postpone civil claim 

* Barclays faces $1 bln civil claim by Amanda Staveley's PCP 

* Barclays to file defence in civil claim in four weeks 

* Barclays to pay 100,000 pound legal costs 

(Adds Barclays dropping attempt to halt civil case) 

By Kirstin Ridley and Anjuli Davies 

LONDON, May 19 (Reuters) - Britain's Serious Fraud Office expects to complete an inquiry by the end of the year into Barclays and former executives over undisclosed payments made to Qatari investors in 2008, a London court was told on Thursday. 

Andrew Onslow, a lawyer for the SFO, told the High Court the prosecutor expected to decide by early next year whether to bring any criminal charges in the investigation into Barclays' multi-billion pound capital raising to avert a state bailout at the height of the credit crisis. 

Onslow made the announcement during a civil case brought against the bank by PCP Capital Partners, the investment vehicle of dealmaker Amanda Staveley, which is claiming around $1 billion in damages, alleging fraudulent misrepresentation. 

In a row over whether Gulf investors received the same deal terms for participating in one of the Barclays fundraisings, PCP - which represented Abu Dhabi investors in 2008 - is accusing the bank of making "sham" payments to Qatari investors. 

Since 2008 dealings between Qatar Holding LLC and Barclays were investigated by the Serious Fraud Office (SFO) for suspicious cash-raising practices during the global financial crisis.Allegedly, Barclays received €7.5 billion ($8.2 billion) cash injection from QIA’s subsidiary but did not inform its shareholders.[Barclays was charged with failing to act with integrity and breaching disclosure rules for UK listed companies.

Moreover, in 2011 both the Serious Fraud Office and the Financial Conduct Authority (FCA) investigated Barclays’ €2.4 billion ($2.7 billion) secret transaction with a Politically Exposed Person (PEP) from Qatar whose identity remains protected by the financial giant and FCA. In that case, Barclays failed to conduct “due skill, care, and diligence” at the base of Britain’s anti-money laundering rules.As a result, the UK financial watchdog meted out a record €92 million ($104 million) penalty against the financial giant.

Barclays, which has called the case misconceived, on Thursday abandoned an attempt to postpone it until after the SFO concluded its criminal investigation. It was ordered to pay legal fees of 100,000 pounds ($145,000). 

"We are very pleased with the outcome of today's hearing," said Bree Taylor, a partner at PCP's lawyers Fladgate. "Barclays now have to file a defence within for weeks and pay our legal costs." 

Having argued in court earlier that it risked being accused of perverting the course of justice by re-interviewing suspects facing a parallel SFO inquiry, Barclays later told the court it would not "conduct any further interview with witnesses or suspects (but) go ahead and put in a defence." 

PCP alleges Qatari investors earned a total of 346 million pounds in secret 'sham' payments. Had it known about this at the time, PCP argues it would not have agreed to split about 3.0 billion pounds of Barclays warrants with Qatar and would not have given up a 10 percent interest in the instruments, worth around 720 million pounds. 

Barclays secured more than seven billion pounds from two emergency cash injections in 2008 - mainly from Middle East investors. 

As part of the deal, Barclays said it paid 116 million pounds in advisory fees and commission to Qatar Holdings, but Britain's Financial Conduct Authority has said it failed to reveal two "advisory services agreements" with the Qatari company. 

The FCA said the non-disclosure was "reckless" and fined the bank 50 million pounds. Barclays said it had disclosed one of the agreements, but not the value, and is contesting the FCA findings. That case is on hold pending the outcome of the SFO's investigation. ($1 = 0.6856 pounds) 

(Editing by Mark Potter/Ruth Pitchford) ((kirstin.ridley@thomsonreuters.com; +44)(0)(207 542 7987; Reuters Messaging: kirstin.ridley.reuters.com@reuters.net))

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