(Updates with Heineken comment, formal inquiry)

ZAGREB, March 13 (Reuters) - Croatian officials said on Tuesday they had temporarily ordered a halt to work at a brewery owned by Heineken group and launched an inquiry into alleged dumping of carbon dioxide waste into local sewage.

"Environment inspectors have ordered the brewery to halt its fermentation unit, which effectively means they cannot work, until they put in place the proper system for dealing with CO2," an Environment Ministry spokeswoman said.

"As soon as they notify us that they have done so, we will send a new inspection team to check it out and, if everything is alright, they can resume work."

Carbon dioxide waste is a by-product of the fermentation process.

A Heineken spokeswoman said the CO2 recuperation system was already ready to operate.

"All technical work to initiate the startup of the recuperation system is completed and ready for operation, but we are still waiting for all necessary permits," she said.

Environmental inspectors visited the brewery after an elderly man who had walked his dog near the brewery in Karlovac, 48 km (30 miles) southwest of the capital, Zagreb, fell into a coma and his dog died on Feb. 23.

The man is in hospital being treated for severe damage to his internal organs.

The investigation, which has been welcomed by the brewery, is trying to establish whether his condition was caused by inhaling toxic waste from the brewery.

Many Karlovac residents have also complained of nausea and breathing problems, Croatian media reported.

The Karlovac county court questioned five brewery officials, including the chief technical director and chief engineer, and ordered a formal inquiry into the matter on Tuesday.

The five are suspected of ordering the discharge of carbon dioxide into the plant's waste water system, from where it reached the town's sewage and a nearby stream, state radio said.

After the inquiry, the judge can dismiss the case or charge the suspects, who could face up to 10 years in jail if convicted. The brewery could also be ordered to pay a big fine.

The brewery manager, Monique Peters, said in a statement: "We understand the community's concerns and we all want to clear up this situation. If the final outcome is that the brewery is responsible, we shall respect all legal consequences."

The brewery has also launched an internal inquiry.

"We are fully cooperating with the authorities and continue with out internal investigation but we have to wait for the outcome," the Heineken spokeswoman said.

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