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Unfortunately when running Windows 10, this question is no longer just trying to prevent the popup and/or a forced upgrade. It also now includes a request for help in RE-enabling 7.x to run at all. I will need help to RE-enable it with W-10.

As of January 31st, 2019, Skype 7.x is demanding an upgrade, and then shuts down without starting if not allowed to continue.

I've found this log file, showing services from Skype's new "modern app", version 14.138.38 that stopped any 7.x from running: C:UsersUSERAppDataLocalPackagesMicrosoft.SkypeApp_kzf8qxf38zg5cLocalStateDiagOutputDirSkypeApp0.txt -- Now, I will try to disable to modern app, which might allow Skype 7.x to run. Reinstalling earlier Skype 7.x versions appear to do nothing. @Rycochet, what OS are you running where you got it to work??

The balance of this question and suggestions remain here because it might help Windows 7 users, or serve other archival reasons, but is otherwise mostly obsolete.

USE FOR ARCHIVAL or Windows 7 PURPOSES ONLY:

I'm trying to prevent Skype from upgrading to the current hideously unhelpful version [Now* = 8.x] from version [Now* = 7.x]
6.21.0.104, (Running Windows 10). There are, [were], four methods that Skype uses to flag or request an upgrade:

NOW* = January 1, 2019 -- SHORT update added below to: July 14th, 2018 = Updated question (and ONE answer):

Update January 20th, 2019 -- Version 7.xx is STILL working and NOT updated... But then, my Windows 10 still keeps complaining about not having enough space to complete ANY Windows 10 updates, with only 5 GB of available free space. (Defender IS still being updated.)

UPDATE: July, 17th, 2018 = It appears that ALL versions 7.x will cease to function soon. This just appeared in my version 7.40.0.151 from January, (and I will update this answer after updating to 7.41.1.101):

---

Note: My solution below is mostly a RECENTLY TESTED rehash of the accepted answer below, from user, "@Just Lucky Really".

Now* - Windows updates in Windows 10 (and presumably Windows 7) is much more aggressive in forcing updates, and has included Skype. Gone are any options to choose to not "upgrade". Don't just give in and endure horrible "early alpha-version UI's quality". Here's one proven method for Windows 10 to keep Skype 7.x. This will only work for a short time, since they will likely break this method again:. (This answer has been REPEATED HERE TO SAVE YOU TIME, so please don't flag as a DUPLICATE. When it breaks again as I know it will, I will update this answer here.)
1. Check your current running version of Skype to make sure it is still 7.x
2. Find or get a copy of your preferred version 7.x of "SkypeSetup.exe".
(Search: "SkypeSetup.exe". Ask via comment below and I will add a link.)
3. Open "Windows File Explorer" to C:usersCURRENT-USERtemp
4. Find SkypeSetup.exe, hover over it to ensure it's the unwanted 8.x version.
5. Replace this file with your 7.x version and change the attribute to READ-ONLY.

Rant, but with a solution: I'm sick and tired of playing whack-a-mole, manually "fixing" every PC, just to prevent well-intended, but poorly executed damage and unwanted changes that updates cause. It is a waste of our time, even though no single fix is difficult. There's a better way:

We have a platform that is designed to keep ahead of any unwanted changes (like Skype) to your PC, by automatically updating itself to make any changes you want, and to keep those changes applied to your PC, without any additional action or time on your part.

If you'd like to identify which problems most need solving, (including controlling Skype updates), and also help create the operational solutions, please comment below and I will provide a link to contribute. The goal is to simply USE PCs without WASTING TIME, fixing and learning.

1. OBSOLETE: "Windows Upgrade", as KB2876229. If you have set Windows to automatically apply upgrades, then you will have not choice. If set to notify only, you can easily hide KB2876229 by highlighting and right-clicking.




2. OBSOLETE: In "Advanced Settings", "Automatic Updates" is set to off.




3. UNKNOWN: "Skype Updater" service is set to Disabled and is not running.




4. Skype.exe also independently opens a popup periodically, and you must refuse the upgrade to close it. This is the pop-up I'd like to prevent from opening. How can I prevent this popup?

NOW* = Although this popup is still the "problem", in the future, you won't even get a warning. It will just WHACK your existing version without asking!

I found what seems to be a solution at http://community.skype.com/t5/Windows-desktop-client/how-to-turn-off-the-skype-update-notifications/td-p/903552/page/2 ...

1) Redownload the SkypeSetup.exe file for the current version of Skype you wish to use/have installed

2) Navigate to the temp folder with the SkypeSetup.exe that updates to the newest version every time you start Skype

3) Delete SkypeSetup.exe, and replace it with the setup file for the current version of Skype you desire

4) Before you start Skype again, make sure to right click the SkypeSetup.exe file you have planted in the Temp folder, check Read-only, and hit apply

-This locks the file from being updated by Skype when you start it, and also takes the place of the Setup file Skype tries to force you to download-

5) Start Skype

This still works for my Skype 7.34.66

1. Close your Skype.


2. 
   

   Find this folder (or press Win + R [Run] and type %Temp%):

   
   
   

   C:Users(your user name)AppDataLocalTemp

   
   



3. Find file SkypeSetup.exe



4. Replace it with empty file (or you can open it with prefered text editor and wipe all text) and mark it with attribute Read Only.


5. Start your Skype as usual.

Tip: in file "Properties" -> "Security" deny "full access" for your user - it will guaranteed for asking permission before deleting (sometimes I clean this folder and delete it accidentally)

This method below fixed it for me where the file name SkypeSetup.exe in the %temp% directory did not exist (was elsewhere named Skype-Setup.exe).

Instructions to prevent/remove the Skype 'update warning popup'

Download your prefered Skype version. www.skaip.org/skype-versions

Uninstall any previous versions of Skype.

Restart your machine 'Offline' (no internet connection).

Install your prefered Skype version.

Goto Skype Tools, Options & turn off Automatic Updates.

Goto windows 'Services' & disable 'Skype Updater' service.

.............................................................

(My version is Skype 7.38.. on Windows 7)

Goto :-

C:Users(your user name)AppDataRoamingMicrosoftSkype for Desktop

Rename file Skype-Setup.exe to something like Skype-Setup-Original.exe

Create a new file in that directory using a text editor of some kind (like notepad)

Add random content to that new file (like the line below) & save as Skype-Setup.exe

22 44 66 22 44 66 22 44 66 Etc Etc Etc

RightClick the new Skype-Setup.exe file (in file manager/windows explorer) & change Properties to 'Read Only'

.............................................................

Restart your machine normally 'Online' (with internet connection).

Hit the keys Window + R
In the run box type
%Temp%
Find SkypeSetup.exe
Right click and choose properties.
Choose the security tab and choose advanced
Here you want remove access to the system and then apply changes
You will have to use administrator access but afterwards the system can not run the program and it will just sit there doing nothing and not bug the user with annoying update notices.

If you want it to return to the nornal conditions just delete the SkypeSetup.exe and another will replace it within the next few times of running skype.

How to disable Skype Update service:

1. Click Start


2. Run


3. Type services.msc (or run it in whatever manner you like)


4. Find SKYPE UPDATER


5. Right click Skype Updater


6. Properties


7. Startup type


8. Disabled