UPDATE 1-Czech state attorney halts investigation of P.M. Babis -newspaper

A Czech state attorney has halted an investigation of suspected fraud by Prime Minister Andrej Babis, the newspaper Denik N reported on Monday, citing two sources with knowledge of the state attorney's decision.

The state attorney's office said its opinion of the case had been "changed" but declined to provide further details pending the official notification of the parties. The police have charged Babis with illegal tapping of a 2 million euro ($2.2 million) development subsidy a decade ago, prior to his entry into politics.

The investigation has been hindering Babis's political career as most parties rejected joining a government led by a prime minister facing prosecution. His ANO party won the last general election in 2017. "The state attorney submitted his final decision in the case, in which he changed his legal opinion," spokesman Ales Cimbala said.

"A senior state attorney will now revise the decision to determine whether the change is legal and justified," he said. ($1 = 0.8973 euros)