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UPDATE 1-Angola holds off on chasing dos Santos' assets abroad - prosecution

Victoria Waldersee

(Adds comments, context)

LISBON, Jan 13 (Reuters) - Angolan courts have refrained from action to seize billionaire ex-first daughter Isabel Dos Santos' assets abroad but will not hesitate to do so if necessary, a prosecution spokesman said.

The comments appear to de-escalate Angolan authorities' row with dos Santos by indicating her foreign business interests are not in their crosshairs for now.

Angola seized dos Santos's domestic assets on Dec. 31, alleging she and her husband steered payments of more than $1 billion from state oil company Sonangol and official diamond trading group Sodiam to companies where they held stakes.

She denies the allegations as a "witch hunt" aimed at weakening her father Jose Eduardo's influence and distracting from failures under new President Joao Lourenco.

"The assets we have seized are those under the jurisdiction of the court. We did not take any action in other countries with whom we have judiciary cooperation, but if necessary we will not hesitate to resort to these mechanisms," prosecution spokesman Alvaro Joao told Reuters by email from Luanda.

The asset freeze pertaining to dos Santos, her husband Sindika Dokolo and associate Mario da Silva will not be treated as a corruption allegation because it is a civil matter about debts to the state, the spokesman added.

"The parties can resolve the case in a number of ways: recognising the debt to the state, and paying it, or taking it to the end of the case to let the courts decide."

Dos Santos, named Africa's richest woman by Forbes with a fortune estimated at over $2 billion, is a highly divisive figure in Angola. Supporters see her as a top entrepreneur while detractors say she embodies the continent's corruption blight.

Dos Santos holds significant stakes in several important Portuguese firms, including in Eurobic bank, telecoms company NOS, engineering company Efacec, and oil and gas company Galp Energia.

Since Lourenco succeeded Eduardo in 2017, after a nearly four-decade rule, he has cracked down on the role of his predecessor's children in state enterprises.

He fired dos Santos from her job chairing oil firm Sonangol and her brother from the sovereign wealth fund.

"This is a political trial, you have a persecuting state and servile and partisan magistrates. Then you have a woman who has been chosen to set an example as a scapegoat. That's me," dos Santos told Reuters last week in London. (Reporting by Victoria Waldersee; Writing by Noah Browning; Editing by Louise Heavens and Andrew Cawthorne)