* EU and NATO missions will remain deployed
* Serb northern part remains outside government control
By Fatos Bytyci
PRISTINA, July 2 (Reuters) - Western powers agreed on Monday to stop overseeing Kosovo in September, four years after it proclaimed independence, but NATO troops and EU police will continue to monitor the former Serbian province still troubled by occasional ethnic violence.
The 25-member International Steering Group, including the United States and major EU powers, said at a meeting in Vienna that Kosovo could now walk on its own feet without supervision - although ethnic clashes and tensions with Serbia have been rising in the past months.
They said the International Civilian Office (ICO), which oversees Kosovo's independence under Dutch diplomat Pieter Feith, would close in September. However, the European Union police and justice mission, known as EULEX, and a 6,000-strong NATO peacekeeping force will remain deployed.
"The supervised independence does not end just because Pieter Feith goes home. All countries that were part of this steering group are present in Kosovo and they will continue to supervise Kosovo," said Pristina political analyst Krenar Gashi.
The event in Vienna was broadcast to Pristina via a videolink. Kosovo Prime Minister Hashim Thaci, who attended the meeting, hailed the decision as a "historic day" for Kosovo.
"This day shows how long the journey we have passed as the nation striving towards freedom and independence," Thaci said.
Around 50,000-60,000 Serbs in a tiny northern part of Kosovo bordering Serbia reject Kosovo's independence and oppose the Pristina government, challenging NATO and EU troops.
Only last Thursday, more than 50 people were injured when Kosovo police and a group of visiting Serbs clashed at the border with Serbia.
Western powers have urged Serbian authorities to dismantle its security structures in northern Kosovo and stop supporting its ethnic kin there, who want Kosovo to be partitioned.
They asked the government in Pristina to continue dialogue with Belgrade and work with the Serb community in the north.
"People there are in increasing numbers asking for services from the Kosovo government and this is a sign of increasing engagement," said Feith.
ICO holds broad executive authority to ensure the implementation of an independence plan, which also defines the rights and protection for the Serb minority.
Serbia lost control over Kosovo in 1999 after an 11-week NATO air war waged to halt the killing and expulsion of the region's majority ethnic Albanians by Serbian forces fighting a counter-insurgency war.
Kosovo's independence has been recognised by 91 states, mainly Western countries, but not by Russia, China and Serbia. (Editing by Zoran Radosavljevic and Mark Heinrich)