By Matt Scuffham

LONDON (Reuters) - Kraft Foods <KFT.N> has vowed to maintain discipline in its pursuit of British chocolatier Cadbury <CBRY.L>, suggesting the U.S. group will resist raising the price of its hostile bid.

In a rebuttal of Monday's aggressive defense statement from Cadbury, the maker of Ritz crackers and Philadelphia cheese said a combination of the companies would deliver "substantially more value than Cadbury could achieve on its own."

Kraft's offer is worth 729 pence per share but many analysts believe it will need to pay 820 to 850 pence in order to be successful.

"Kraft will continue to maintain a disciplined approach with respect to the acquisition of Cadbury in line with the criteria outlined in our offer documentation," said Kraft Foods Chairman and CEO Irene Rosenfeld in a statement on Tuesday.

Shares in Cadbury were down 0.75 percent to 789 pence at 1034 GMT (5:34 a.m. EST), well above the level of Kraft's approach, suggesting the market believes a bidding war could escalate.

"We think Kraft will need to raise its offer toward 820 pence even if there is no counter bid," said Evolution Securities analyst Warren Ackerman.

"The emergence of credible counter bidders for Cadbury could mean that Kraft has to materially increase its bid to be successful. We think an 850 pence bid with a 400 pence cash element could satisfy the criteria Kraft has laid out for remaining a disciplined buyer," he added.

On Monday, Cadbury teased shareholders with the prospect of rival bids and promised bigger dividends and stronger growth as it again knocked back Kraft's hostile 10 billion pound ($16.3 billion) offer.

America's Hershey <HSY.N> and Italy's Ferrero have both indicated they are contemplating bids. Swiss food giant Nestle <NESN.VX> is also viewed by analysts as a potential suitor.

Responding to Cadbury's defense document, Kraft urged shareholders to question whether Cadbury can hit its new revenue growth targets, if it can deliver its margin targets without further spending on restructuring, whether its margin goals are achievable and what its underlying cash flow is.

"We have heard nothing from Cadbury that surprises us. Cadbury's defense document only reinforces our belief that there is a compelling strategic and financial rationale to combining these two companies and that doing so would be in the best interest of both companies' shareholders," said Rosenfeld.

Cadbury responded by saying Kraft "seem to have run out of ideas."