* LIBERTY Ostrava offers to buy insolvent energy producer

* Offer aims to resolve dispute with TAMEH Czech

* TAMEH Czech says LIBERTY Ostrava owes it $85.55m

* Offer alternative to accord on lower prices, volumes

PRAGUE, Feb 26 (Reuters) - Major Czech steel maker LIBERTY Ostrava is making a takeover offer for TAMEH Czech, an insolvent energy producer to whom it owes millions of dollars, to resolve a crisis that has hobbled both companies, a manager at the steel maker said.

LIBERTY temporarily shut down its only operating blast furnace in October amid weak demand. It sent most of its 6,000 workers home and entered a three-month debt moratorium in December pending restructuring efforts.

TAMEH, which claims over 2 billion crowns ($85.55 million) in past-due debts from LIBERTY, shut off supplies and declared insolvency.

Resolution of the dispute with TAMEH is key for both firms, and closely followed by suppliers and customers.

Crisis manager Theuns Victor told Reuters in an interview that LIBERTY is seeking an accord on lower prices and volumes, but was also willing to buy the coal-fired, on-site energy plant, as it aims to restart one blast furnace.

"We are in the process of finalising an offer that will go to TAMEH, where we say, if you don't want to restructure, maybe the next step is then just sell the asset to us," Victor said in the interview conducted on Friday.

A spokesman said on Monday the offer had been sent to TAMEH shareholders. TAMEH had no immediate comment on the proposal.

LIBERTY has annual capacity of 3.6 million metric tons of steel, and is part of the LIBERTY Steel group owned by commodities tycoon Sanjeev Gupta.

ArcelorMittal and Poland's Tauron own TAMEH.

If attempts for new business terms or a takeover fail, a fallback plan was to install electricity-powered compressors to supply air to the blast furnace, Victor said.

The technology would bring additional costs and take about a year to install but would reduce expensive carbon emissions, he said.

TAMEH has said the way to resolve the dispute would be repayment of past-due debt. It has said its energy prices are based on a contract that allows for a margin of just 1%.

Victor said LIBERTY could not repay the outstanding debt outside an overall solution for future supply costs and volumes, which would also be lower with expected output after restructuring of around 1 million tonnes of steel annually.

A court was due to hold a hearing on Wednesday to possibly lift the debt moratorium early due to possible insolvency, news website www.seznamzpravy.cz said, but Victor maintained LIBERTY was solvent.

"We are confident that we will be able...to explain to the court hearing exactly where we are and what we are planning to do, and convince the court that the moratorium, at least, should stay in place for the duration," he said.

LIBERTY has restarted some operations, bringing in about 1,500 workers, using stocks and starting to import steel slabs for processing. It said on Monday it planned to bring back to work another 1,500 employees "in the nearest time". ($1 = 23.3790 Czech crowns) (Reporting by Jan Lopatka; Editing by Sharon Singleton)