(Updates with further British ambassador comments)

By Opheera McDoom

KHARTOUM, Dec 2 (Reuters) - Two leading British Muslim politicians will meet Sudan's president on Monday, raising hopes that he will grant the early release of a British teacher jailed for allowing her class to name a teddy bear Mohammad.

Gillian Gibbons was sentenced on Thursday to 15 days in jail for insulting Islam to be followed by deportation.

"The President will meet the British parliamentarians tomorrow at 10:30 a.m. (0730 GMT) in the Republican Palace," a source at President Omar Hassan al-Bashir's palace said.

But the influential Council of Islamic Scholars in Sudan warned the government not to free Gillian Gibbons earlier, saying it would "wound the sensibilities of Muslims in Sudan".

Gibbons was sentenced after her class of seven-year-olds named a teddy bear Mohammad, the same name as Islam's Prophet as part of a school project.

Baroness Sayeeda Warsi, who has travelled to Khartoum with Lord Ahmed, a fellow member of the House of Lords to seek Gibbons' freedom, said they were optimistic the 54-year-old mother of two could be released soon.

"I'm still hopeful ... I understand the cultural and religious sensitivities around Islam but as a British woman I have huge concerns for Gillian," Warsi told Reuters.

"This is a huge issue and we must remain optimistic and hopeful that we can resolve it as early as possible."

Britain's ambassador to Sudan, Rosalind Marsden, said Monday's meeting with the president was grounds for optimism.

"We very much hope that following the meeting with the president tomorrow morning the decision will be taken to release Mrs Gibbons as soon as possible," she told reporters.

Islamic scholars said the government would face problems if it reduced Gibbons' sentence, which they said was too light.

SWORDS AND FLAGS

Hundreds of Muslims took to the streets of the capital on Friday, many waving swords and Islamic flags, calling for her death.

"If the government retracts this judgment ... this would be a very bad precedent and it would have very bad consequences on the reputation of the state ... not only in Sudan but also outside Sudan," Council Spokesman al-Sheikh Mohammad Abdel Karim said.

"Retracting this light sentence ... would wound the sensibilities of the Muslims in Sudan," he told Reuters. "This is not a matter to be settled politically. This is a matter which goes to the very core of Muslims and their sensibilities."

Gibbons' case has highlighted the pressures Bashir faces in balancing hardline Muslim opinion with improving Sudan's relationship with the West, which have been damaged by disagreements over how to handle the conflict in Darfur region.

Defence lawyer Kamal al-Jazouli said Gibbons, who is from Liverpool, was being held in a clean, well-guarded prison.

He described her as "smiling if a little bit sad" when he had met her.

"She said she was sad because she never imagined her stay in Sudan would end up like this."

"She loved her pupils very much and they loved her. She said she would miss them when she goes outside Sudan."

Gibbons let her pupils at Khartoum's private Unity High School pick their favourite name for a teddy bear as part of a project on animals in September. Twenty out of 23 of them chose Mohammad -- a popular boy's name in Sudan, as well as the name of Islam's Prophet.

Gibbons was arrested last Sunday and charged on Wednesday with insulting religion, inciting hatred and showing contempt for religious beliefs -- charges punishable by up to 40 lashes, a year in prison or a fine.

British public opinion was shocked by the guilty verdict and the Sudan Tribune news Web site said it had been inundated by hate mail, mostly from Britons. (Editing by Giles Elgood)

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