(Corrects lead to say lifting freeze, not ordering resumption)
* French court suspends decision to freeze Mercedes sales
* Government to decide within 10 days whether to pursue sales freeze
By Chine Labbé
PARIS, July 25 (Reuters) - A French court lifted a government-backed freeze on Mercedes car registrations pending a re-examination of the decision which halted sales because of the use of a banned product.
Thursday's ruling by the Versailles administrative court paves the way for a possible resumption of sales.
The government had halted most of Mercedes' French sales following a dispute with German parent Daimler over its use of a banned air-conditioning refrigerant.
The French environment ministry must now reexamine the decision in full, according to the eight-page summary judgement.
"We welcome the positive decision," Daimler said after the ruling. The luxury carmaker said it was "confident" that French sales would soon resume.
French government officials did not return calls seeking comment.
French authorities have halted registrations of Mercedes A-Class, B-Class and SL cars assembled since June 12 because of Daimler's refusal to stop using the coolant R134a, banned by the EU from use in new models since the start of the year.
The blocked Mercedes models together account for most of the brand's French sales and 2 percent of its global deliveries.
The dispute centres on a German decision to let Daimler continue using R134a, a global warming agent 1,400 times more potent than carbon dioxide, because of safety concerns about the replacement chemical made by Honeywell and Dupont .
The European Commission has warned Germany it faces possible action over the decision by its KBA motoring authority.
France's bar on the Mercedes models has so far prevented the delivery of 4,518 vehicles, of which 2,704 have already been sold to waiting customers, Daimler said in its court filing.
According to the ruling, the government must now reexamine the case and decide whether to pursue the effective sales ban. It does not compel French authorities to resume Mercedes registrations in the intervening 10-day period, a court official said.
(Additional reporting by Gilles Guillaume; Writing by Laurence Frost; Editing by James Regan and Elaine Hardcastle)