BEIJING (Reuters) - China's economic planning agency has given the green light to Blackstone Group (BX.N: Quote, Profile, Research) to buy 20 percent of chemical maker China National BlueStar (Group) Corp, the agency said on Thursday.

The National Development and Reform Commission (NDRC) said on its Web site that it had approved BlueStar's restructuring plan, which would involve selling 20 percent of its enlarged capital to Blackstone, as a strategic investment.

The agency provided no financial details.

Blackstone agreed in September 2007 to buy a 20 percent stake in BlueStar for up to $600 million, marking its first big investment in China.

Under the agreement, chemicals giant China National Chemical Corp is selling the stake to Blackstone and will hold 80 percent of BlueStar after the deal.

China Investment Corp (CIC), China's fledgling sovereign wealth fund, bought a $3 billion stake in Blackstone in May.

The U.S. firm, which has taken part in some of the largest leveraged buyouts, subsequently raised $4.13 billion in its initial public share offer in New York in June, the largest stock market listing in the United States since 2002.

Blackstone's share price has fallen by about half since the IPO, having closed at $18.10 on Wednesday.

BlueStar, with annual sales of 30 billion yuan ($4 billion), is the parent company of Shenyang Chemical Industry 000698.SZ and Blue Star Cleaning Co 000598.SZ, and holds a stake in Blue Star New Chemical Material (600299.SS: Quote, Profile, Research).

(Reporting by Langi Chiang; Writing by Jason Subler; Editing by Jan Dahinten)