As told in my post, 'Show grades' is set to Yes.
The Grades label is shown for the student in Course Navigation, but the error message:
'Sorry, but you do not currently have permissions to do that (View grades of other users)'
If View grades of other users is set to Yes in Site Administrator/Users/Permissions/Define roles/student/View grades to other students is set to Yes, the student can se grades for all students in the course, and that is not wanted.
The grades can be shown in student Administrator menu for all the courses the student partisipant in.