NEW YORK, April 2 (Reuters) -

One of Walt Disney's biggest investors, Norges Bank Investment Management, said on Tuesday it had voted to re-elect the entertainment company's directors, dealing a blow to the hedge funds pushing for seats on Disney's board.

NBIM, which manages the Norwegian Government Pension Fund and owned a 1.2% stake in Disney at the end of last year, said it had voted for 11 of the company's 12 directors but withheld its vote from Mark Parker, chairman of Disney's board.

It did not vote for any candidates proposed by the hedge funds, Trian Fund Management and Blackwells Capital.

Both Disney and the two hedge funds are scrambling to persuade investors who may not have cast their ballots yet to move to their side, in the most closely watched board room battle in America this year.

More voting is expected on Tuesday before the company's annual meeting on Wednesday, which is scheduled to be held virtually at 1 pm eastern time.

By late Monday, Disney appeared to have moved ahead in the race with more than 50% of all shares voted and large shareholders including T. Rowe Price having announced their votes for the company, according to people familiar with the matter.

But these people cautioned that many votes had not been cast yet and that shareholders still have the chance to change their minds.

With news that NBIM backed 11 of the 12 Disney directors, Disney may have gained even more of an edge, for now.

The iconic entertainment giant, valued at $222 billion, is going up against billionaire hedge fund investor Nelson Peltz, who runs Trian and has argued the home of Mickey Mouse has lost its creative spark and bungled its succession planning.

Blackwells Capital, a much smaller investment firm, has said it largely supports Disney's strategy but has a few ideas of its own, including splitting off the company's real estate holdings. Blackwells also wants to keep Peltz off the board and improve transparency for investors at Disney.

NBIM said it withheld its vote for Parker because shareholders "have the right to seek changes to the board when it does not act in their best interest."

For every vote, the fund reviews "unsatisfactory financial and strategic performance, mismanaged risk-taking, unacceptable treatment of stakeholders or undesired environmental or social outcomes from company operations", it said.

(Reporting by Svea Herbst-Bayliss; Editing by Kirsten Donovan and Devika Syamnath)