GABORONE, Dec 18 (Reuters) - Botswana's government said on Monday it would not appeal a high court ruling that hundreds of Bushmen had been wrongly evicted from ancestral hunting grounds and should be allowed to return.

The president's office said in a statement it would not initiate an appeal in the case which saw Africa's last hunter gatherers take on one of the continent's most admired governments in a dispute over diamond-rich land and development priorities.

Activists say more than 1,000 Bushmen want to return to the Central Kalahari Game Reserve, an area of desert the size of Belgium which the government has set up as one of Africa's largest protected game reserves.

A statement from the attorney general said that under the judgement the government was not obliged to restore essential services terminated in 2002 and the move was not unlawful.

The court said it saw no grounds for out-of-court claims by the Bushmen that the government and diamond giant De Beers wanted to clear the land for diamond mining -- the basis of a major publicity push by western pressure groups.

The Bushmen say their way of life was being wiped out as they were re-settled into bleak camps where they were unable to use their traditional hunting skills.

Botswana argued that western activists have romanticised a Bushmen lifestyle that vanished long ago.

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