WASHINGTON (Reuters) - The U.S. Environmental Protection Agency said on Tuesday it has the legal power to block permits for so-called mountaintop coal mines, a move that could affect hundreds of mining operations.

The EPA voiced concerns about the controversial mining practice and said it could veto permits issued by the U.S. Army Corps of Engineers if the mines would permanently impair water quality by fouling valley streams.

This could affect hundreds of operations where mining permits have been sought or granted.

The environment agency made its position known in a pair of letters to the U.S. Army Corps of Engineers, which grants permits for this kind of destructive mining under the condition that mine operators rebuild the streams.

The EPA strongly questioned whether the human-made channels often used to replace natural valley streams meet this condition.

“The two letters reflect EPA’s considerable concern regarding the environmental impact these projects would have on fragile habitats and streams,” Lisa Jackson, the agency’s chief, said in a statement.

“I have directed the agency to review other mining permit requests,” she said. “EPA will use the best science and follow the letter of the law in ensuring we are protecting our environment.”

The essential components of living streams -- microscopic animals and plants -- suffer downstream from mountaintop mining sites, compared with undisturbed sites, the EPA letters said. The letters referred to two specific operations in West Virginia where mountaintop mining is proposed.

The EPA’s move is a departure from the agency’s stance during the Bush administration, which supported mountaintop mining. Coal companies consider it an economical alternative to traditional underground mines in Appalachia, where production is declining.

More than half of U.S. electricity is derived from coal.

Environmentalists and community activists in coal country decry it as ecological devastation and went to court to prevent it in West Virginia, but a three-judge panel of the U.S. Appeals Court in Richmond, Virginia, overturned a ban on the practice on February 13.

The appeal was brought by Massey Energy Co and the West Virginia Coal Association.

Joan Mulhern, an attorney with the environmental legal group Earthjustice, said the matter is still in flux and the plaintiffs have the right to ask the whole appeals court to hear the case.

But Mulhern said EPA was showing a “seismic shift” in U.S. policy.

“The EPA is saying this is a significant transition from Bush policies on mountaintop removal to Obama administration policies,” Mulhern said by telephone.