(Adds protest)

By Jack Kim

SEOUL, June 25 (Reuters) - South Korea will allow the resumption of U.S. beef imports starting Thursday, the farm ministry said, implementing an unpopular deal that sparked street protests and caused a crisis for the government.

Analysts expect South Korea to proceed with caution in resuming imports because any misstep by President Lee Myung-bak could lead to a sharp backlash and further delay his pro-business economic reforms for Asia's fourth-largest economy.

South Korea and the United States at the weekend said they had reached a private-sector deal to restrict trade in U.S. beef to cattle under 30 months old and to forbid exports of parts that are thought to pose a higher risk of mad cow disease.

Several thousand turned out in central Seoul to protest the resumption of imports in what has become a nightly ritual of rallies against Lee's government.

Protesters scuffled with riot police wielding truncheons and shields blocking the way to the presidential Blue House with dozens involved in the mayhem taken into custody.

Once the legal notice for the resumption is published on Thursday, some 5,300 tonnes of U.S. beef that has been in frozen storage in South Korea for months could be inspected and then quickly head to stores.

But government officials said on Wednesday they do not expect importers to immediately request quarantine checks.

"(I) asked for the publication of the legal notice," farm minister Chung Woon-chun said in a statement, adding Seoul "will send back shipments that do not meet the agreed criteria."

NEW DEAL ON BEEF

South Korea, which blocked imports of U.S. beef in 2003 after an outbreak of mad cow disease, had briefly allowed in boneless meat from cattle under 30 months old last year but suspended imports after prohibited material was found in shipments.

The new deal will allow in beef containing bones and other parts of cattle deemed of lower mad cow risk than brain and spinal material. While U.S. beef has been out of the market, South Koreans have turned to meat from Australia and New Zealand.

South Korean officials said the reworked pact would increase safety checks on U.S. beef, but hours after it was announced last Saturday, a violent rally erupted in Seoul.

Surveys published this week said most South Korean think it is time to end the protests but respondents were also highly critical of Lee for failing to meet their expectations for protecting public health when striking the beef deal.

Lee, who scored a landslide in a December election, has seen his popularity plummet after his government signed a deal in April to allow the import of U.S. beef from cattle of all ages.

Analysts said Lee will not be able to implement his reform agenda that includes corporate tax cuts and privatising state-run firms unless he can win back public support.

"(Recent) moves to address his shortcomings appear to offer a glimmer of hope that important reforms to the Korean economy are still on the agenda," Moody's analyst Daniel Melser said.

Last week, Lee apologised for the original agreement, promised a fresh start for his four-month-old government and sacked most of his top aides. On Tuesday, he ordered tough action against protesters who break the law.

"The president apologised a few days ago, but now he's trying to enforce the beef deal without listening to us again," protester Yoon Jung-koo said. (Writing by Jon Herskovitz, additional reporting by Miyoung Kim and Jung Heejung; Editing by Keiron Henderson and Sanjeev Miglani)

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