Serbia to pay 380 mln eur to buy back telco stake from OTE

* Greece's OTE to return 20 pct stake in Serbian telco

* Serbia agrees to pay 380 mln euros for the shares

* OTE is a unit of Germany's Deutsche Telekom

ATHENS, Dec 18 (Reuters) - Serbia will spend 380 million euros ($495.79 million) to gain full control of its state-run Telekom Srbija, buying back a 20 percent stake held by Greece's OTE, a unit of Deutsche Telekom.

Telekom Srbija's board met on Dec. 16 to approve the terms of the deal, which has yet to be finalised, the company said on Saturday in a statement posted on its website.

Owning 100 percent of Telekom Srbija will make it easier for Belgrade to push ahead with long-delayed plans to find a new investor for the company.

In May, the government rejected a 1.1 billion euro offer by Austria's Telekom Austria to buy a 51 percent stake in Telekom Srbija, saying the offer should have been at least 300 million euros higher.

Telekom Srbija will take out a loan to finance part of the purchase, the company said, in line with statements by the country's Prime Minister earlier this month that the deal would not weigh on the country's budget.

OTE acquired its Telekom Srbija holding in 1997. But it has not been able to do much with the stake because Serbia balked for years at giving up management control or reducing further its 80 percent stake in the company.

By the time Serbia offered to sell a majority stake in Telekom Srbija in late 2010, OTE was out of the race, hampered by an economic crisis at home.

Deutsche Telekom, which owns 40 percent of OTE and has so far lost almost 1 billion euros ($1.34 billion) on its investment, is pushing the company to cut costs and raise cash to service its debt and invest in new services. ($1 = 0.7665 euros) (Reporting by Harry Papachristou; Editing by Jon Loades-Carter)