* Dwarfs half-million bequest from nurse Joan Edwards
* Britain must be able to pay off entire national debt
* Trustees trying to use at least part of fund
LONDON, Aug 17 (Reuters) - An anonymous half-million poundbequest to Britain has mushroomed to 350 million pounds ($546million) since it was made 85 years ago, trustee Barclays Banksaid on Saturday - but London lawmakers can not get their handson it.
The donor left the money in 1928, but said it should only behanded over once Britain had amassed enough funds to pay off itsentire national debt, which now totals 1.2 trillion pounds.
News of the current size of the potential payout came weeksafter Britain's government struggled with the terms of anotherhalf million pound donation, in the will of retired nurse JoanEdwards.
A Barclays spokesman said the bank had been tryingunsuccessfully to get permission through the courts either touse the 1928 bequest to make charitable grants or to hand it allto the Treasury.
"We've been working ever since we became the trustee (in2009) to change the original objects, which say the funds can beused only to pay off the entire national debt," he added.
The Financial Times newspaper said the donation was probablyinspired by Conservative Prime Minister Stanley Baldwin who in1919, as financial secretary to the Treasury, urged the rich tohelp pay off Britain's debt from World War One.
It noted that donor had stipulated the trustees could usepart of the funds to pay down the debt if, in their opinion,national circumstances merited a payment.
Neither World War Two nor any debt crises since have movedthe trustees to pay out.
Barclays said it would continue working with theAttorney-General's Office and the Charity Commission to find asolution.
"It's a unique set of circumstances and heightened awarenessof the national debt has occasionally generated interest in theFund," said the spokesman.
This year, Prime Minister David Cameron's Conservatives andtheir coalition partners, the Liberal Democrats, initiallydivided Joan Edwards' money between them, saying it had beenleft to "whichever party" was in power when she died.
But they decided to hand the money to the Treasury afterprotests from newspapers and MPs who said Edwards had intendedto help the nation, not political parties.
In a copy of the will seen by the Daily Mail newspaper,Edwards, 90, left her wealth to "whichever government is inoffice at the date of my death for the government in theirabsolute discretion to use as they think fit".