* Last major regulatory hurdle cleared
* Decision follows six years of negotiations
* Top lawmaker furious, puts pressure on govt (Adds Australian prime minister comment)
By Byron Kaye
SYDNEY, July 9 (Reuters) - China Shenhua Energy Co Ltd 601088.SS has cleared the last regulatory hurdle to build a 10 million tonnes a year coal mine in prime farmland in eastern Australia, prompting sharp criticism from the country's farm minister.
Shenhua bought a licence to develop the A$1 billion ($745.90 million) Watermark thermal and semi-soft coking coal project in the state of New South Wales six years ago, just before a peak in coal prices which have since slumped to more than five-year lows.
It then took until January this year to secure approval from the state government to begin construction, following lengthy assessments and modifications to plans in response to concerns raised by farmers.
The final approval, from Federal Environment Minister Greg Hunt, means the company can build its first large-scale mine under strict environmental controls. The company must now prove to Hunt and the state government that it can comply with their conditions, as well as determining for itself whether the project is still viable under them.
"Mr Hunt's approval is the final piece in an overwhelming body of evidence showing the Watermark Project will not harm the region's valuable agricultural enterprises," Shenhua Watermark Project Manager Paul Jackson said in a statement.
However the approval also puts pressure on Prime Minister Tony Abbott, who relies on a coalition between the conservative Liberal party and rural-focused Nationals to form government.
In a posting on Facebook, Farm Minister Barnaby Joyce, a National, said he had done everything in his power to block the mine and "it is ridiculous that you would have a major mine in the midst of Australia's best agricultural land".
A spokesman for Hunt, a Liberal, did not return a call requesting comment. The Department of Environment published an approval document for the project dated July 4 and signed by Hunt.
Abbott dismissed Joyce's outburst, saying "we are all local members first" and the government can shut down the mine if it breaches any of its 18 environmental conditions.
The mine will be away from any actual farms so "this is another one of those situations where high quality agriculture and mining can continue to coexist", he added.
($1 = 1.3407 Australian dollars) (Editing by Christopher Cushing)