ATHENS (Reuters) - Greece has won an appeal over objections from forestry officials to a major tourism project in Athens that forms part of its third international bailout, overcoming one of the obstacles to turning the site into one of Europe's biggest coastal resorts.
The 8 billion euro ($9.39 billion) project to develop the disused Hellenikon airport site is being closely watched by Greece's European Union and International Monetary Fund lenders and potential investors in the crisis-hit country.
The project features prominently among privatization targets in the country's 86 billion euro aid package, the third since the crisis began in 2010.
Greek developer Lamda signed a 99-year lease with the state in 2014 for the 620-hectare (1,530-acre) area, once the site of Athens airport. But the project has faced delays, partly over a long-running row between developers and those who fear it will destroy the environment.
Forestry authorities in May declared 3.7 hectares (9 acres) of the estate as protected woodland, on a spot developers said was integral to the project.
Greece's privatization agency, which is in charge of concluding the deal with Lamda, appealed the decision. A four-member panel of the country's forestry department ruled on Monday that the plot was not forest.
"The agency's appeal ... was upheld by a 3-to-2 majority," the committee's president, Christos Antonellis, told Reuters, adding that the decision was expected to be published by Wednesday.
The decision is subject to appeal.
The privatization agency's chief, Lila Tsitsogiannopoulou, said the decision was "positive" and that the agency's appeal had strong legal grounds.
Separately, the government's top advisory body on the protection of antiquities recommended on Tuesday that only 30 hectares (74 acres) of the 620-hectare plot under the project be declared an archaeological site, according to sources close to the process.
Government officials said the decision was a "big step for the development of the investment, in line with Greek law and the protection of cultural heritage". Lamda was not immediately available for comment.
The recommendation is not binding, but the culture ministry always respects the body's decisions. Backed by Chinese and Gulf investors, Lamda submitted its detailed development plan for Hellenikon in July.
The Central Archaeological Council was still discussing the issue and had yet to approve the investment plan, one of the sources said. The council has held three inconclusive meetings on this issue this month. [L8N1M7372]
The Hellenikon project has become a major political issue in Greece, which is slowly emerging from a multi-year debt crisis.
Prime Minister Alexis Tsipras, whose leftist party strongly opposed it before coming to power in 2015, is now seen as keen to implement the deal to help boost economic activity and reduce unemployment, the euro zone's highest.
($1 = 0.8522 euro)
(Reporting by Angeliki Koutantou; Editing by Louise Heavens and Peter Cooney)