(Repeats, without changes, story first published on Thursday)
By Lidia Kelly and Katya Golubkova
MOSCOW, March 10 (Reuters) - Moody's decision to stop issuing local credit ratings on Russian companies is the start of a process that will eventually allow a Kremlin-promoted national rating agency to dominate, market players said on Thursday.
That process began last year when President Vladimir Putin, angered at downgrades of Russia's sovereign rating by Moody's and Standard and Poor's, accused the big Western agencies of "politicised" actions, suggesting they were taking the West's side in the stand-off over the Ukraine conflict.
Putin approved a law regulating the activities of ratings agencies and expedited the creation of a new national Analytical Credit Rating Agency (ACRA).
Moody's cited the new law when announcing its decision late on Wednesday to stop issuing national ratings for companies and other organisations within Russia.
In a sign that other agencies could follow suit, Fitch said the new law would put its Russia subsidiary in direct conflict with its international regulatory obligations, although it was continuing a "constructive dialogue" with Russia's central bank.
"This is just the beginning of a large and rapid redistribution of the market, which has been formed over 20 years," Alexei Savatyugin, former deputy finance minister, said on his Facebook page.
The change fits with a trend under Putin's rule for state-backed actors to squeeze out independent players, especially those with foreign ties, from crucial sectors of the economy.
The big three international agencies will continue to set Russia's sovereign debt ratings and will also dominate in global ratings of major Russian assets. But for local ratings, the changes clear the way for the new national agency to dominate.
"The decisive reason (for Moody's decision) is the arrival of the new Russian agency, which the central bank has been heavily promoting and which will become the most significant domestic player," said Chris Weafer, a senior partner with Macro-Advisory in Moscow.
DIFFICULT TASK
Russia's finance ministry said the new law would stop agencies withdrawing ratings at the behest of foreign governments, something Moscow fears if, for example, the West imposed a new round of tougher sanctions.
But deputy minister Alexei Moiseev acknowledged that it will be difficult for international agencies to meet the new requirements on national ratings.
Moody's said its decision to stop issuing national ratings follows "legislative changes and other potential restrictions" on the independence of its Russian joint venture, Moody's Interfax Rating Agency.