UPDATE 1-S.Africa peace event put off after Dalai Lama ban

* South Africa denies visa

* Decision draws sharp criticism

(Adds Mandela's grandson, China's response)

By Agnieszka Flak

JOHANNESBURG, March 24 (Reuters) - A South African peace conference of Nobel laureates has been postponed after the government denied a visa to Tibet's spiritual leader the Dalai Lama, organisers said on Tuesday.

Several Nobel peace prize winners had threatened to boycott the event over the visa ban, but the government said it was standing by its decision. Local media said the visa was refused after pressure from China, a big investor and trade partner. South Africa said it was not influenced by China.

The conference, due to take place on March 27, was organised by soccer authorities in South Africa, the host of the 2010 World Cup, and was expected to use soccer as a way of fighting xenophobia and racism ahead of the tournament. "We have decided to postpone the peace conference until further notice," said Irvin Khoza, South Africa 2010 Organising Committee chairman. He said it would be postponed until all those invited could attend.

The Dalai Lama was invited to participate in the conference by fellow Nobel laureates Archbishop Desmond Tutu, F.W. de Klerk and Nelson Mandela.

Government spokesman Thabo Masebe said the Dalai Lama's presence was not in South Africa's best interest at the moment.