Macedonia strikes deal to end political impasse -envoy

BELGRADE, March 1 (Reuters) - The main political parties in Macedonia reached a deal on Friday to end an opposition boycott of parliament that had threatened the country's chances of securing accession talks with the European Union, a European envoy said.

The stand-off had raised Western fears of instability in the impoverished Balkan country of 2 million people. The main SDSM opposition party has been boycotting parliament since late December and threatening to shun a municipal vote due in March.

A European parliament envoy said an agreement had been struck for the opposition to take part in the vote and return to parliament, following a visit by the EU's enlargement commissioner, Stefan Fule.

There was no immediate word from the SDSM or Fule. A government official, who declined to be named, confirmed the deal.

"This is a deal which has been struck late but I hope and believe not too late," European parliamentarian Richard Howitt told reporters in Skopje. "The agreement is crucial to this country's European perspective."

Macedonia's efforts to join the EU and NATO have been hostage to a dispute with neighbouring Greece over Macedonia's name, which it shares with a northern Greek province. Greece wants it changed.

Mindful, however, of the threat of instability in a country that lurched to the brink of civil war in 2001, the EU has signalled it might agree to open accession talks this year even without first resolving the name dispute.

That would send a vital signal to much-needed investors, and go a long way to settling tensions with the country's 25 percent ethnic Albanian minority, which rose up for greater rights and representation in 2001.

The SDSM has been boycotting parliament since they were thrown out of the assembly by security during a brawl in late December. The government official said they had agreed to set up a commission to investigate the events.

The opposition accuses Prime Minister Nikola Gruevski's rightist coalition government of increasing authoritarianism.

(Reporting by Kole Casule; Writing by Matt Robinson; Editing by Mark Heinrich)