By Rajiv Sekhri

TORONTO, Mar 28 (Reuters) - Concern over genetically modified foods swam from corn, rice and potatoes to fish on Tuesday as Greenpeace urged the US food watchdog not to let Canadian fish farmers sell fish engineered in labs.

The environmental group, long opposed to genetic engineering, covered the roof of a Canadian fish plant with a building-sized banner denouncing genetically modified (GM) fish. It called on the US Food and Drug Administration (FDA) to deny firms permission to sell the fish and petitioned Canadian Fisheries Minister Herb Dhaliwal to ban GM fish.

"GM fish represent a potentially huge danger to our oceans and seas," said Greenpeace spokesman Michael Khoo. "We must stop the experiment now before irreversible damage is done."

The Greenpeace campaign is directed in part against Massachusetts-based A/F Protein Inc., which has two Canadian subsidiaries that research genetically modified fish and has filed with the FDA for permission to sell them.

The company denies its fish pose any risk to those in the wild and says Greenpeace "ignores science."

"They have an agenda and there is just no talking around it. It's half science and half truth," said Dr. Arnold Sutterlin, a research scientist who manages Aqua Bounty Farms.

"There is no environmental fear. (As a) matter of fact, we feel our fish are far more environmentally friendly because they are reproductively incapable," he added.

Greenpeace said studies show genetically altered fish can damage natural fish and Khoo doubted Aqua Bounty's statements that altered fish can be made sterile.

"Sterility is never a 100% guarantee. And the largest study they have done on their own is on 500 fish. That's ridiculous when agricultural facilities regularly have 100,000 fish at a time," he said.

Greenpeace cited a Purdue University study that 60 fertile modified fish introduced into a wild population of 60,000 could decimate the stock in 40 generations.

There has been bitter debate about the health effects of genetically altered food, and some scientists warn of a "Trojan gene" effect that could damage or destroy entire species of plants or animals. A modified animal could interbreed with the unmodified one in ways that could destroy the species.

Khoo said Greenpeace wants countries to ban breeding of genetically modified fish. Britain, New Zealand, Chile, Canada, the United States and Norway need to pay the most attention, he said, as they produce most of the world's salmon.

Proponents of modified fish say the world seafood supply must rise sevenfold by 2020 to meet demand, and they worry that it could take several years for the FDA to give the green light.

"It is a very lengthy process. It is not like how Greenpeace makes it out to be that the government does not know what to do and that the government and industry are in bed with each other," Sutterlin said.

Khoo said the Canadian and US governments do not test GM foods on their own, thereby compromising public health policy.

"The government gets data submitted to them from biotech companies. It is a conflict of interest, having biotech companies provide their own data on their own food," he said.

The Royal Society of Canada, a scientific think tank, called for tougher tests and gave Greenpeace some support.