Your data directory...is not writable

I finally started to install Elgg on a production server but the installer throws a wobbly with the following message:

"Your data directory /home/*****/*****.org/pvtdata/ is not writable"

I checked that the data directory is writable (777).

Elgg resides in /home/*****/*****.org/htdocs/

Any useful tips or clues are welcome. Thanks.