BUENOS AIRES, Nov 14 (Reuters) - Argentina's president has vetoed a law protecting the country's glaciers that would have restricted mining and oil drilling, officials and environmental campaigners said on Friday.

The law, which was passed by Congress last month, might have complicated plans by the world's biggest gold miner, Barrick Gold Corp (ABX.TO: Quote, Profile, Research, Stock Buzz), to build a $2.4 billion mine straddling the snowy Andean peaks between Argentina and Chile.

But President Cristina Fernandez used her veto, saying in a decree that governors in Andean provinces feared the glacier law could threaten economic development in their regions.

"Banning mining and oil exploration and extraction ... would give environmental considerations preeminence over activities that could be undertaken in a way that protects the environment," said the decree, published earlier this week in the government's official gazette.

It said it "was excessive" to ban mining or oil drilling activity on glaciers and in so-called periglacial areas that border glaciers.

A Mining Secretariat source, who asked not to be named, said the law contained "imprecisions" that would have impeded various activities -- not just mining.

Barrick's Pascua Lama project faced a storm of protests from green activists in Chile, but it was finally given approval by the Chilean government after the company promised not to touch the Andean glaciers that edge the remote site.

Soon after, it got approval from Argentine authorities.

However, the company has not been able to start work on the mine because of a dispute between Argentina and Chile over how to share the tax proceeds from the cross-border project.

Environmental campaigners condemned the government's veto of the glacier law, which they saw as a vital tool to protect and study glaciers in the face of global warming.

"If these natural storage tanks of fresh water supply us with drinking water, supply farming, industry and help generate electricity, then we think water is worth more than gold," said Norberto Ovando, vice president of the Friends of the National Parks association.

The law also sought to establish a monitoring system to evaluate the impact of climate change on Argentine glaciers. (Reporting by Helen Popper; Editing by Christian Wiessner)