(Updates with Eni statement)

By Raushan Nurshayeva

ASTANA, Sept 11 (Reuters) - Kazakhstan warned Italy's Eni on Tuesday that delays in developing the giant Kashagan oilfield threatened the country with unacceptable economic harm, as high-level talks to settle the row over the project intensified.

Kazakhstan suspended operations at the Kashagan oilfield in the Caspian Sea last month and demanded the Eni-led <ENI.MI> consortium pay billions of dollars in compensation, citing ecological violations, cost overruns and repeated delays.

Eni Chief Executive Paolo Scaroni met the Kazakh Prime Minister Karim Masimov, Energy and Natural Resources Minister Sauat Mynbayev and other top officials in the Central Asian state.

"During their meeting the energy minister said it was unacceptable to harm the economic interests of the Republic of Kazakhstan and expressed concern over systematic violations by certain foreign resources companies of the national laws and ... project delays," the energy ministry said in a statement.

"Delays at developing the Kashagan oilfield ... will lead to a substantial fall in planned economic growth over the next decade and threaten the implementation of long-term economic development programmes in the country."

Emboldened by high oil prices, resource-rich Kazakhstan has long been mounting pressure on the group of mostly Western oil majors working on the Kashagan project, which is Astana's entry ticket to the club of top 10 global oil producers.

READY FOR DIALOGUE

The Kazakh energy minister said, however, that his country was ready to continue talks.

"Kazakhstan is ready for an open dialogue aimed at solving the question of Kashagan's development and I ask you not to politicise our justified demands..." the statement quoted the minister as telling Scaroni.

Eni said the talks will continue after Tuesday's meetings.

"During the talks, which were held in a climate of cooperation and focused on the Kashagan project, the basis was set for negotiations between the KCO consortium, of which Eni is operator, and the Kazakh authorities," Eni said in its statement.

Kazakhstan has accused the consortium of a host of violations, from environmental issues to fire safety rules, in a case which has triggered talk among analysts about so-called resource nationalism and harmed investor confidence.

Last week, Masimov demanded a leading role for state energy firm KazMunaiGas [KMG.UL] in running the field -- the biggest oil discovery in the last three decades -- after Astana had threatened to replace Eni as operator.

Speaking on the eve of the talks, Italy's Foreign Minister Massimo D'Alema said he hoped for a "breakthrough in negotiations" before Italian Prime Minister Romano Prodi's visit to Kazakhstan, expected in October.

On Tuesday, Italy's Economic Development Minister Pierluigi Bersani said he was optimistic about the Kashagan project.

The other participants in the Kashagan consortium are Royal Dutch Shell <RDSa.L>, Exxon Mobil Corp <XOM.N>, Total <TOTF.PA>, ConocoPhillips <COP.N>, Japan's Inpex Holdings Inc <1605.T> and KazMunaiGas.

-- Additional reporting by Svetlana Kovalyova in Milan

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