* Idea for new airport near Nantes first mooted in 1960
* Project mired in indecision and political squabbles: PM
* Existing Nantes airport will be modernised (Adds more comments from Philippe, details, context)
PARIS, Jan 17 (Reuters) - The French government abandoned plans for a new 580 million euro ($709.80 million) airport in western France on Wednesday in favour of expanding an existing airport in Nantes, a sensitive decision that past governments had shirked for decades.
Prime Minister Edouard Philippe said hundreds of eco-activists and anarchists squatting on the site of the proposed new development in the village of Notre-Dame-Des-Landes would have until spring to evacuate -- something the activists have previously rejected.
Hundreds of riot police have moved into the area to ensure public order is maintained, Philippe said, amid fears other militant activists across France could arrive to reinforce their numbers. Many protesters have barricaded themselves in.
"The government must be clear in its choice and firm in its application," Philippe said in televised statement.
Supporters of the proposed airport, designed to handle four million passengers a year initially, argued it would aid economic development in the Loire-Atlantique region and that the existing inner-city airport was congested and a security risk.
But opponents said it was too costly, unnecessary with another under-utilised airport 110 kilometres (68.35 miles) to the north in Brittany and environmentally unfriendly.
The environment issue weighed heavily, with President Emmanuel Macron having championed the fight climate change since his election, with promises to "make our planet great again".
French construction giant Vinci, which had won the contract to build and operate the new airport, said it was ready to discuss the issue with the government. ($1 = 0.8186 euros) (Reporting by Paris bureau; Writing by Brian Love; Editing by Richard Lough)