LONDON, Feb 20 (Reuters) - The London Metal Exchange (LME) confirmed on Friday that it is imposing permanent restrictions on members with large positions in nearby contracts, a move initially introduced on a temporary basis last June.

The exchange, the world's oldest and largest market for industrial metals, said in October it wanted to make the restrictions permanent and subsequently held a consultation of members, which it said garnered support for the measure.

"Overall, market participants conveyed that a rules-based solution applied in a fair and consistent way would bring stability, transparency, and confidence to the market," the LME said.

The restrictions require holders of long positions that are greater than the total stock levels to lend back to the market at a zero premium.

In June, premiums for nearby copper contracts jumped due to falling inventories combined with large positions held in nearby dates, prompting the LME's Special Committee to direct market participants to reduce large on-exchange positions.

The LME said at the time that the actions were taken to head off the development of a potential "corner" on the market or an "undesirable situation".

Premiums for nearby copper contracts have since declined and moved into discounts, while inventories have climbed.

The LME is owned by Hong Kong Exchanges and Clearing Ltd 0388.HK.

(Reporting by Eric Onstad; Editing by Joe Bavier)

((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO; Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net))