THE HAGUE (Reuters) - The International Court of Justice said on Monday a cluster of disputed islets in the western Caribbean belonged to Colombia and not to Nicaragua, but drew a demarcation line that expands Nicaragua's economic exclusion zone in the Caribbean.

The court said the territorial waters extending out from the seven islets, which are nearer Nicaragua's coast than Colombia's, should not cut into Nicaragua's continental shelf.

The ruling increases the size of Nicaragua's continental shelf and economic exclusion zone in the Caribbean, potentially giving it access to underwater oil and gas deposits as well as mining and fishing rights.

"The court agrees that the achievement of an equitable solution requires a line of delimitation to allow the parties to attain their maritime rights in a mutually balanced way," said Peter Tomka, presiding judge.

In 2007, the court, which is based in The Hague, ruled in a long-running dispute between the two countries that the three larger islands of San Andres, Providencia and Santa Catalina belonged to Colombia.

The ruling on Monday related to a further seven islets and the associated offshore mineral rights surrounding them.

The three larger islands have been controlled by Colombia since Nicaragua ceded them in a 1928 treaty.

The cluster of islands is over 700 km from the Colombian coast but only 200 km from Nicaragua.

Nicaragua argued the territorial rights extending out from the islets' shores deprived it of offshore economic rights to an excessive degree.

(Reporting by Thomas Escritt; Editing by Alison Williams)