(Adds details on Greece project, comment from ministry official)
Nov 9 (Reuters) - Eldorado Gold said on Thursday it would freeze investments in its Skouries gold mine in Greece, taking a tough stand in its battle with the country's government.
The differences between Eldorado and the government have dragged on for years, mainly over environmental regulations. Eldorado blames Greece for long delays in issuing necessary permits.
Athens has said the miner violates contractual obligations by submitting a deficient plan to build a metallurgical plant that will process ores mined in Skouries and Olympias. The government has launched an arbitration process in an effort to sort out the standoff.
The arbitration started earlier this month and is expected to last three months, an energy ministry official told Reuters on condition of anonymity.
The ministry will not "comment as long as the arbitration process is ongoing", the official said.
The company's investment is one of the biggest in Greece and has long been viewed as a test of the country's resolve to attract foreign capital.
In September, Eldorado threatened to halt new investment in its Olympias, Skouries and the Stratoni mines in the northern Greek region of Halkidiki, unless the government granted it permits and showed a willingness to engage in talks. However, the company soon backed down on that decision.
Eldorado said on Thursday it would move the Skouries project back into "care and maintenance" and re-assess its investment in the project upon approval and receipt of required permits.
The miner also said it had started legal action against Greece's Ministry of Energy and Environment over its failure to grant it necessary routine permits.
"Although we have made good progress on the Olympias mine, we require the necessary permits and government support prior to investing further in Skouries," Eldorado CEO George Burns said in a statement.
"As a consequence we are now taking the necessary legal action to enforce the company's rights while continuing efforts to resolve outstanding matters through ongoing dialogue."
The company is unlikely to be granted permits in Greece until the arbitration process has been resolved, BMO Capital Markets analyst Andrew Kaip said in a note to clients. (Reporting by Nivedita Bhattacharjee and Angeliki Kountantou; Editing by Anil D'Silva)