* Technical clearance given to GM mustard on Aug. 11
* Final decision needed by govt minister; opposition likely

A government panel has cleared commercial use of what would be India's first genetically modified (GM) food crop, but the political establishment will still have to give final approvals amid wide-spread public opposition to the technology.

Technical clearance for indigenously developed GM mustard seeds was given on Aug. 11 by the panel of government and independent experts following multiple reviews of crop trial data generated over almost a decade, said two sources with direct knowledge of the matter.

The decision to go ahead is likely to be made public soon by the environment ministry's Genetic Engineering Approval Committee, and is expected eventually to move to Prime Minister Narendra Modi's desk via Environment Minister Anil Madhav Dave.

Dave could not immediately be reached for comment.

News of the approval comes at a time when U.S. seed maker Monsanto - which dominates the GM cotton market in India - is facing heightened government regulation that has forced the company to consider quitting a country it has operated in for decades.

Reuters reported on Wednesday that Monsanto had withdrawn an application seeking approval for its next generation GM cotton seeds in India, escalating a long-running dispute between New Delhi and the world's biggest seed maker.

Permitting GM food crops is a big call for India, which spends tens of billions of dollars importing edible oils and other food items every year. Farmers are stuck with old technology, yields are at a fraction of world levels, cultivable land is shrinking and weather patterns have become less predictable, experts say.

But political and public opposition to lab-altered food remains strong amid fears that GM crops could compromise food safety and biodiversity.

Some grassroots groups associated with Modi's nationalist Bharatiya Janata Party have also opposed GM crops because of the reliance on seeds patented by multi-nationals like Monsanto, DuPont, Dow Chemical and Syngenta, which is to be taken over by a Chinese company.

India placed a moratorium on GM eggplant in 2010, also after an experts panel had given its clearance, effectively bringing the regulatory system to a deadlock.

Modi, however, who was instrumental in making Gujarat state India's leading user of GM cotton when he was chief minister there, cleared several field trials for GM crops soon after taking office in New Delhi in 2014.

The GM mustard developed by Delhi University scientists makes use of three genes already incorporated in rapeseed hybrids in Canada, the United States and Australia.

Extensive biosafety tests have revealed no cause for concern, according to a field trial report submitted to the government and seen by Reuters.