* Pfizer hints at improved offer if AstraZeneca engages
* Pfizer CEO Read tells lawmakers hostile bid not ruled out
* Read says can't commit to specific research spend
* Head of Unite union says members "very, very concerned" (Adds comments from select committee meeting)
By Ben Hirschler and Kate Holton
LONDON, May 13 (Reuters) - U.S. drugmaker Pfizer suggested it could raise its proposed $106 billion offer if AstraZeneca engaged in talks, as its boss was grilled by UK lawmakers on his commitment to British research spending and jobs.
The New York-based group said it was disappointed by AstraZeneca's refusal to discuss its proposed merger. Chief Executive Ian Read did not rule out a hostile bid, telling a parliamentary committee he had various "options" for his next move.
Having pledged to keep a fifth of research jobs in Britain, Scottish-born Read said he could not commit to maintaining a specific R&D budget there.
"We'll be efficient by some reduction in jobs. What I cannot tell you is how much or how many or where. We'll look at this as our global combined footprint and then we'll make decisions," Read said.
He told the panel he expected the combined research expenditure of the merged drugmaker would be lower than that of the two separate companies, noting one of the drivers of his proposed deal was to increase efficiency to keep both firms competitive in an increasingly tough marketplace.
Pfizer warned that Britain's second-biggest drugmaker could wither without its financial muscle, after AstraZeneca rejected its May 2 cash-and-stock offer worth 50 pounds a share and said it had a bright future as an independent business.
In a statement earlier on Tuesday Pfizer expressed again its frustration at the rebuff and said working with the UK company's board could help deliver "optimal deal terms" which AstraZeneca could recommend to its shareholders.
"Engagement would provide AstraZeneca management with the opportunity to provide Pfizer a better understanding of the business and its prospects, and the credible basis for their new long-range targets," it said. "Pfizer will continue to be disciplined on price."
Pfizer is widely expected to come back with a sweetened offer for AstraZeneca this week, although people with knowledge of the matter said it was likely to wait until after the parliamentary hearings to make any new move.
Pfizer's bid would be the largest foreign takeover of a British firm and is opposed by many scientists and politicians, as well as AstraZeneca itself.
Parliamentary select committees cannot block corporate transactions but they can question executives ferociously, as banks, energy companies and Rupert Murdoch's News Corp have all found out to their cost: The media coverage resulting from these firms' sessions with lawmakers confirmed them as corporate bad guys for many members of the public and placed their future dealings under even closer scrutiny.
Pfizer already has a tarnished reputation in Britain after shutting down most of its research in southern England where Viagra was invented, with the loss of some 1,700 jobs.
Now it faces scepticism about its long-term commitment to AstraZeneca - though Read told the panel "I'm a man of my word."
Pfizer has given a five-year commitment to complete AstraZeneca's new research centre in Cambridge, retain a factory in the northwestern English town of Macclesfield and put a fifth of its research staff in Britain if the deal goes ahead.
However it has also said it could adjust those promises if circumstances changed "significantly."
Allan Black, national officer for the GMB trade union, told the select committee said: "Worryingly, the lawyers we've consulted don't see any obvious mechanism to make a five-year commitment binding."
Unite, Britain's biggest trade union, ran an advertisement in the country's biggest free morning newspaper Metro on Tuesday, saying Pfizer was "the wrong prescription for Britain."
Tony Burke, Assistant General Secretary of Unite, said his members were "very, very concerned" about Pfizer's record of cutting 65,000 jobs worldwide since 2005.
AstraZeneca pushed out details on its new drug pipeline late Monday and early Tuesday morning, flagging good news on drugs for asthma, rheumatoid arthritis, lupus and diabetes to prove it can stand on its own.
Read also came under fire over the ethics of re-domiciling in Britain, for tax purposes only, in order to cut its tax bill - a move that has sparked anger as well in the United States, where the taxman stands to lose out.
Pfizer admits the proposed deal will involve job losses and result in it paying less tax but argues such things are necessary to improve efficiency in an industry where governments are pressuring drug companies to cut costs.
In Tuesday's sessions lawmakers will also interrogate AstraZeneca's French CEO Pascal Soriot and business minister Vince Cable.
Then a second parliamentary committee on May 14 will question both CEOs again, along with British science minister David Willetts, about the science aspects of the deal.
"They can make enough noise to cause embarrassment and bring a real spotlight onto this whole deal, which could be pretty uncomfortable for Pfizer," said Navid Malik, head of life sciences research at Cenkos Securities. (With additional reporting by William James; Editing by Sophie Walker)