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LAKE BAIKAL, Russia, Aug 1 (Reuters) - Russian Prime Minister Vladimir Putin said he may reopen a paper mill after inspecting the bed of Lake Baikal and being told by scientists that the mill does not harm the environment.

Workers at the paper mill, controlled by tycoon Oleg Deripaska, once Russia's richest man, threatened hunger strikes and highway blockades after the loss-making mill closed down in October 2008. The mill employs 2,000 people and is the main employer in the town of Baikalsk, which has a total population of 17,000. It also runs the only heating station in the town, where temperatures plunge to minus 30 Celsius in the winter.

"First of all we need to create jobs and only after that stop production," said Putin, emerging after a 4-1/2-hour dive into the lake in a deep water submersible [ID:nL1300354]. He said he "did not rule out" the mill being reopened.

Deripaska, who is now Russia's most indebted businessman, owns 51 percent of the Soviet-era mill through his investment vehicle Basic Element. The government owns 49 percent.

Basic Element blamed the plant's closure on a court decision, supported by ecologists, which banned the mill from disposing of waste water into the lake. The ban also meant the mill could not finish the full cellulose production cycle.

UNDERWATER TRIP

Scientists who accompanied Putin on his underwater trip told him the paper mill did not do much damage to the unique lake.

"So far industrial activity did not do much damage to Baikal. It cleans itself," the head of the Oceanology Institute, Robert Nigmatullin, told Putin.

"I see the bed of Lake Baikal and it is clean," Putin told reporters through a hydrophone from the submersible, which dived 1,400 meters into the lake. "Baikal is in good shape, there is practically no environmental damage," he said afterwards.

Putin has been touring the country dealing with the economic crisis, Russia's harshest in a decade. He is often seen on television visiting nearly bankrupt factories, scolding their managers and owners and ordering banks to issue loans.

Last month, Putin humiliated Deripaska by treating him as an errant schoolboy on national television. He then forced him to sign a contract restarting supplies to idle factories in the town of Pikalyovo, 270 km (168 miles) from St Petersburg.

"There is no war with the owners now. They are even ready to maintain a loss-making operation. In general they are ready for everything now," Putin told a meeting of environmental officials in a clear reference to Deripaska. Scientists, who have studied the area around the mill from the two submersibles, said they could only find an increased content of cellulose in the area but no poisonous chemicals. "We need to open the plant for the winter. Baikal lived with this plant for much longer and will survive for another eight months," said Viktor Minayev, deputy head of the Lake Studies Institute.