* Sale of former Fortis Dutch insurance units can continue
* Shareholder group continues case for compensation
* Dutch state applauds decision
(Adds Dutch state comment)
AMSTERDAM, Aug 6 (Reuters) - A group of shareholders opposed to last year's break-up and nationalisation of Belgian-Dutch financial concern Fortis lost their attempt to halt further dismantling of the company, the group said on Thursday.
The group, FortisEffect, sued the Dutch state in January, saying the deal in October unfairly wiped out their stakes in the firm. They wanted to block the Dutch state from selling Fortis's two Dutch insurance units.
FortisEffect, which represented around 10,000 owners of Fortis shares, bonds and options, also wants damages from Fortis Holding, Fortis Netherlands, its executives, the Dutch and Belgian governments, and supervisors such as the Dutch and Belgian central banks.
After a partial nationalisation of Fortis by the governments of Belgium, Luxembourg and the Netherlands at the end of last September, the financial group was broken up along national lines in October.
The Dutch state took over its Dutch operations for 16.8 billion euros, including the two insurance units, and has said it plans to sell the units. It sold one unit to UK insurer Amlin in June.
But the commercial court in Amsterdam ruled on Wednesday that it could not freeze the sale of the insurance units because it had already partially happened and there were practical objections on how to manage the units under a sale freeze.
"This ruling strengthens the Dutch state's position that the Fortis transactions are irreversible and the state is not liable for damages," the Dutch state said in a statement.
The legal proceedings on the issue of damages are continuing, with written responses from the defendants in the case due next month. (Reporting by Ben Berkowitz and Gilbert Kreijger, editing by Will Waterman)