* Oslo cuts payments by 60 percent to $42 million
* Forest destruction picked up in 2016 but slowed in 2017
* Norway wants to protect Amazon as part of climate policy
OSLO, Dec 8 (Reuters) - Norway has slashed its annual payments to Brazil to protect the Amazon rainforest by 60 percent to $42 million after a rise in forest destruction in 2016, but welcomed signs that losses have slowed this year, Norway's Environment Ministry said on Friday.
Norway makes annual payments to Brazil as part of a long-term billion-dollar programme to curb the loss of Amazon rainforest to slow global warming. Forests are a giant store of carbon dioxide, the main man-made greenhouse gas, but are being cut down for logging and to make way for farms.
Norway paid 350 million crowns ($42.16 million) for Brazil's performance in 2016, the ministry said. The payments were down about 60 percent from an average 925 million crowns in the period from 2009-16.
"When deforestation goes up, payments go down," Environment Minister Vidar Helgesen said in a statement.
"I am however pleased to notice that initial deforestation figures for 2017 show a reduction. If confirmed, this would lead to increased payments next year," he said.
In June, Norway told visiting Brazilian President Michel Temer that it was set to cut payments.
Norway, which has huge wealth from oil and natural gas produced in the North Sea, has been the biggest foreign donor to protect tropical forests from Brazil to Indonesia.
Brazil's deforestation climbed to 7,900 sq km (3,000 sq miles) in the year to June 2016 - about the size of Greece's Mediterranean island of Crete - from 6,200 sq km in 2015.
Annual losses in recent years, however, are below the 19,000 sq km lost per year in the decade to 2005.
($1 = 8.3014 Norwegian crowns) (Reporting by Alister Doyle; Editing by Peter Graff)
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