(Adds China comment, paragraphs 8,9)

By Lindsay Beck

BEIJING, Dec 20 (Reuters) - China's support has been vital to achieving initial steps towards national reconciliation in military-ruled Myanmar, an EU envoy said on Thursday, but added that Beijing would not directly pressure the junta to reform.

China, a major trading partner of Myanmar and one of its only allies, is seen as one of the few voices that could wield influence with the junta, which is under pressure to reform following massive anti-government protests this year.

But Piero Fassino, EU special envoy on Myanmar, also known as Burma, said Chinese officials had told him they would not directly push for the release of political prisoners or that of detained opposition leader Aung San Suu Kyi.

"During my meetings with the Chinese authorities, they made clear that the way ahead regarding the Burmese crisis stands with the Burmese themselves," Fassino told a news conference.

"Of course I believe that it's our duty to encourage Burmese leaders to go along that direction, and in that regard the release of Aung San Suu Kyi and the main political leaders are very positive steps," he said. "But what the Chinese say is that it's up to them to take the final decision."

Earlier this year, pro-democracy protesters led by Buddhist monks staged the country's largest anti-government demonstrations in nearly 20 years.

The official death toll from the junta's resulting crackdown is 31, but some Western diplomats say the figure is much higher.

A Chinese Foreign Ministry spokesman said Beijing supported dialogue and hoped to see a stable Myanmar, but repeated that it opposed efforts to force the regime's hand.

"The international community should respect the Myanmar government's sovereignty and opinions when looking at its problems," spokesman Qin Gang told a news conference.

Fassino said that despite its opposition to sanctions, China was playing a "very important role" in steps toward a resolution to the crisis. These include talks between the junta and United Nations special envoy Ibrahim Gambari, and Myanmar's naming of a go-between with Suu Kyi.

"We are aware that in order to achieve these first steps, the Chinese intervention has been essential," he said.

But China opposes sanctions as a means of pressuring the regime and is loath to compromise its investments in Myanmar's natural resources, which include natural gas and timber.

By contrast, the European Union has adopted sanctions against 1,027 firms in Myanmar and expanded visa bans and asset freezes on its rulers. Last week, EU leaders said they were ready to tighten sanctions if the government did not ease repression.

"I made clear (to the Chinese) that these are not our goal, they are a tool," said Fassino, who held talks with Chinese Assistant Foreign Minister He Yafei and the head of the Communist Party's International Department, Wang Jiarui.

Fassino said he had requested from Myanmar that he be allowed to visit in March and that Gambari hoped to return in January. He denied that, months after the demonstrations had been put down, the window of opportunity for change there had closed.

"Actually I do not believe the Burmese crisis is over," he said. "To the contrary, we have to engage on the Burmese issue when the situation is not overheated." (Additional reporting by Ben Blanchard; editing by Roger Crabb)

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