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TORONTO, Mar 18 (Reuters) Nortel Networks Corp. said on Friday that insurers will pay $228.5 million towards lawsuit settlements, bumping up to $2.7 billion the amount the telecommunications equipment supplier will pay to investors claiming damages from accounting troubles.

Last month, Nortel agreed to pay $2.47 billion, including $575 million in cash from its reserves, to settle two class action lawsuits that stemmed from the bookkeeping scandal that rocked the Brampton, Ontario-based company.

The $228.5 million will bring the cash portion to $803.5 million, Nortel spokeswoman Patricia Vernon said.

To make up the rest, Nortel will issue 628.7 million common shares, or 14.5 per cent of its current equity, the company said last month.

Nortel said on Friday it had agreed with insurers to certain indemnification obligations and that these were unlikely to materially increase its total cash payment. Nor would the insurance payment reduce the amount Nortel will pay under the settlement, it said.

Nortel's stock was off 1 cent at $2.93 in New York. It was flat at C$3.39 on the Toronto Stock Exchange.

''The announcement has no impact on our financial estimates for Nortel,'' said Desjardins Securities analyst Paul Howbold in a note.

''However, we would again caution that the preliminary settlement of $2.4 billion could be affected by the further revenue contract review that was announced on March 10.'' On March 10, Nortel posted a preliminary $2.2 billion fourth-quarter loss, stemming from the two suits, on revenue of $2.9 billion. It also said it would have to once again restate financial results to fix accounting mistakes.

It was the third time in less than three years that Nortel has been forced to fix its results, a saga that started in November 2003, when it first uncovered bookkeeping errors. It subsequently fired its top three executives, including Chief Executive Frank Dunn.

As part of the settlement announced on Friday, Nortel said it had also agreed to corporate governance improvements, including a promise that its non-executive chairman will stand for annual election.

Nortel said it was still in talks with the plaintiffs on reaching a final settlement agreement.

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