* Prague has sued Warsaw over environmental impact of mine
* Poland says agreement being finalised to end dispute
* Czech source says suit could be dropped if conditions met (Adds Czech PM, Polish spokesman comments)
WARSAW/PRAGUE, May 25 (Reuters) - Poland and the Czech Republic are finalising an agreement that should end a legal dispute over the environmental impact of a Polish open pit coal mine close to the border between the two countries, a Polish government spokesman said on Tuesday.
Polish Prime Minister Mateusz Morawiecki said earlier the Czech government had agreed to withdraw its lawsuit over the Turow mine, only for his Czech counterpart Andrej Babis to say Prague was continuing with the legal case.
“Yesterday, a team meeting was held, during which the framework of the agreement between Poland and the Czech Republic was established,” Polish government spokesman Piotr Muller wrote on Twitter.
“The complaint is to be withdrawn after the final agreement is signed.”
A Czech government source said the lawsuit could be withdrawn once Warsaw met conditions agreed between Morawiecki and Babis. The person did not elaborate on what they are.
On Friday, the Court of Justice of the European Union (CJEU) ordered Poland to immediately stop mining at the site operated by Polish state-run company PGE, pending a final decision in the case brought by the Czechs.
The Czech government had argued a planned expansion of the mine was environmentally damaging for communities on its side of the border, and that Warsaw had violated EU law by extending mining at Turow until 2026.
Environmental groups and Czechs living close to the border had complained drinking water supplies had been affected by the mine and that they had suffered from noise, dust and subsidence.
Morawiecki told reporters at an EU summit in Brussels that Poland would finance projects worth up to 45 million euros ($55 million) to help prevent the loss of groundwater across the border caused by the mine.
Poland would also build screens to stop dust particles from polluting the air in the Czech Republic.
The two countries would also set up a committee of experts to determine the environmental impact of the mine.
“As a result of this plan, we will be able to say that the whole matter is closed and the power plant and the mine will continue to work,” Morawiecki said.
$1 = 0.8159 euros Reporting by Alan Charlish in Warsaw, Robert Muller and Jason Hovet in Prague, Gabriela Baczynska and Jan Strupczewski in Brussels; Editing by Giles Elgood and Mark Potter