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(Adds details, analyst comments)
* TSX ahead 4.98 points at 12,394.40
* Energy shares rise, materials lag
* Greece approves austerity deal, but worries remain
By Jon Cook
TORONTO, Feb 13 (Reuters) - Canadian stocks were flat at midday on Monday as energy issues rose after Greece approved a controversial austerity bill to secure a second bailout, but the TSX's gains were held in check as the European Union still had to approve the deal.
Athens must convince a skeptical euro zone that it will stick to the terms of the deal in order to secure the 14.5 billion euros it needs to meet debt repayments due on March 20.
"Sometimes last-minute conditions are attached to it and things can still fall apart," said Carlos Leitao, chief economist at Laurentian Bank Securities.
"A deal is better than no deal, but let's keep the champagne in the fridge."
At 12:20 p.m. (1720 GMT), the Toronto Stock Exchange's S&P/TSX composite index was up 4.98 points at 12,394.40, after giving up earlier gains and briefly turning negative.
Most of the TSX's 10 main sectors were higher, but gains were hurt by a weak showing from the world's largest gold miner.
Barrick Gold was down 1.1 percent to C$47.72, coming under pressure from plans to sell its 20 percent stake in Russia's Highland Gold, pulling out of one of the world's most promising - but also toughest - gold frontiers.
Energy issues kept the TSX above water, after crude prices rose to near six-month highs, as investors saw the Greek deal helping to stabilize the euro zone economy and increase demand for commodities.
Oil producers were led by Canadian Natural Resources , up 1.1 percent to C$38.18, and Canadian Oil Sands , which rose 3.4 percent to C$22.75.
Financials also climbed on prospects that greater global stability would eventually bring interest rate increases, helping insurers that guaranteed annuities at higher rates before central banks slashed them after the recession.
Manulife Financial was up 0.7 percent at C$11.83 while Sun Life Financial gained 1.1 percent to C$21.09.
"Manulife and other insurance companies would benefit more from a steeper yield curve, to have longterm interest rates come up a little bit, which appears to be the case," said Leitao.
Shares of Valeant Pharmaceuticals International Inc rose 0.4 percent to C$47.90 after the drug maker said it had agreed to buy closely held Eyetech Inc, as it aims to expand its presence in the ophthalmology business.
$1=$1 Canadian Editing by Rob Wilson