* AGM approves Treasury proposal of 11.68 zloty dividend
* Payout equals 2.34 bln zlotys, 80 percent of KGHM profit
* Shares up 3.5 percent
(Adds analyst and management comments, updates share price)
By Wojciech Zurawski and Adrian Krajewski
LUBIN/WARSAW, Poland, June 16 (Reuters) - Poland forced through a $717 million dividend at KGHM at an annual meeting on Tuesday, undermining the state-controlled copper miner's plans to buy assets abroad.
KGHM, whose shares have tripled in value this year on the back of surging copper prices, was Warsaw's best performing blue chip, with a 3.5 percent gain to 87.45 zlotys by 1349 GMT.
The 11.68 zlotys per share dividend voted through by the shareholders, led by Poland's treasury ministry, amount to 80 percent of KGHM's 2008 net profit and was well above the 1.43 billion payout proposed by the management.
The clash over the dividend preceded the Monday decision by Chief Executive Miroslaw Krutin not to seek a new term at the helm of Europe's No. 2 copper producer, after a year in office.
Krutin originally wanted to retain all KGHM's earnings to help it expand beyond its home base before yielding to government pressure to back the smaller payout.
"After a financial analysis at the company, linked to the dividend payout, our investment priorities may change," said Herbert Wirth, a deputy chief executive who is serving as Krutin's temporary replacement.
"We need time, about a month, and then we'll say what the pace of our investments will be," he told a news conference after the shareholders meeting.
Earlier this year, KGHM earmarked 9 billion zlotys for investments to boost copper production and seek deposits abroad, and, thanks to the rebound in copper prices, raised its full-year net profit guidance to 1.9 billion zlotys.
Poland, which controls 42 percent of KGHM, has been twisting the arms of many executives at state-controlled companies to pay hefty dividends to help rescue the state budget.
Treasury Ministry Aleksander Grad told Reuters he was seeking 5 billion zlotys from dividends versus 2.9 billion planned earlier.
Analysts say KGHM's investment plans went sour even earlier, as copper grew more than 60 percent so far this year, breaking the psychological $5,000 a tonne and raising potential takeover costs.
"With copper above $5,000, investment plans are completely unrealistic," said Pawel Puchalski, analyst at DM BZ WBK.
"The fact that the dividend is 900 million zloty larger makes sense, as the money would surely not be spent according to the investment plan." ($1 = 3.263 zlotys) (Additional reporting by Agnieszka Barteczko; Editing by Dan Lalor; editing by Simon Jessop)