The permit withdrawn from British-Dutch Shell is the latest example of official pressure on foreign investors as the Kremlin moves to tighten its grip on the country's vast energy resources.

Sakhalin-2 is the world's biggest privately funded energy project.

"The prosecutor general on Saturday issued an order to cancel... the approval of the ecological assessment. We are required to fulfill this order," ministry spokesman Rinat Gizatulin told AFP.

The decision will halt all work at the 20-billion-dollar (15.8-billion-euro) Sakhalin-2 project, according to the state agency on natural resources, which filed suit last week to have the ecological assessment revoked.

With the environmental permits cancelled, "business and other activity within the framework of Sakhalin-2 will be forbidden until new state ecological approvals are received and all violations of environmental law are eliminated", the agency said in a statement last week.

A hearing on the agency's suit that had been planned for this Thursday has been cancelled, a source at the ministry told news agency Interfax.

"There is no sense in holding this hearing now," a ministry source told Interfax news agency.

A spokesman for Sakhalin Energy, the Shell-led consortium developing the massive oil and gas project off Russia's Pacific coast, said he was not prepared to comment on Monday.

The ministry's move came after weeks of intensifying criticism of Sakhalin-2.

Russia's Natural Resources Minister Yury Trutnev criticized the management of the project last week, saying Russia could lose 10 billion dollars (7.87 billion euros) of revenue because of mismanagement.

Shell's troubles also come at a time when the Russian government is moving aggressively to increase state control over its natural resources sector, especially oil and gas production.

Earlier Monday, a top official at the natural resources ministry said foreign companies' licenses at three energy projects -- ExxonMobil's Sakhalin-1 project, Shell's Sakhalin-2 and Total's Kharyaga Arctic oil field -- were at risk of cancellation.

Ministry director of government policy Sergei Fyodorov said that the licenses could be cancelled on the grounds that technical conditions were not being fulfilled, Interfax reported.

A report by the ministry of natural resources in May attacked both ExxonMobil and Shell for inefficiency and cost overruns at Sakhalin-1 and Sakhalin-2, saying Russian companies should be given majority control of both projects.

Analysts said that Russia's growing desire for majority control of all major energy projects was the main motivation behind recent pressure on foreign companies.

"Everything that is happening around Sakhalin-2 can be interpreted as the Russian government's desire to have more control over these projects," said Andrei Gromadin, oil and gas analyst at MDM Bank.

Valery Nesterov, oil and gas analyst at Troika Dialog, called the stated environmental concerns "a pretext."

The agreements under which Shell, Exxon and Total are operating "were concluded at a time when oil prices were very low. Now that oil prices are higher, there is an understanding in the government that those laws are not as beneficial for Russia as they could be," Nesterov said.

"In a way, it's alarming. It just means that the state continues to tigthen its grip over the oil sector," Nesterov said.

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