UPDATE 1-Russia retail law seeks to cap grocers' growth

*No new space for chains with more than $30 million turnover

*Chains with high market share also barred from expanding

*Anti-monopoly agency does not advocate turnover limits

(Adds comment from retailers' anti-monopoly regulator) By Maria Kiselyova and Maria Plis

MOSCOW, July 16 (Reuters) - Russia's government, which came to the aid of top food retailers in hopes they would mop up weak rivals in the financial crisis, is now putting the brakes on growth in a new draft law, a copy of the bill showed on Thursday.

Prime Minister Vladimir Putin paid a surprise visit last month to a supermarket run by Russia's largest retail chain and scolded its management for charging too much for meat and sausage. The chain immediately announced a "grand sale".

Russians' purchasing power slumped in the country's first recession in a decade, which saw the rouble devalued, unemployment spike to 10 percent and real wages decline. Putin's government is keen to avoid public outrage at economic decline.

The bill stipulates food retailers with annual sales of more than 1 billion roubles ($31.21 million) or market share of more than 25 percent in Moscow, St Petersburg, or any given city district, cannot buy or lease additional trade space.

Yevgeny Fyodorov, head of the Duma Committee for Economic Policies, told Reuters by telephone that the amendment was explicitly intended to rein in national retail chains.

"It is always better to have ten small Gazproms than one big one," Fyodorov said, referring to the powerful Russian state gas export monopoly (GAZP.MM).

"The sector must develop ... but it does not mean that we should have one chain for the entire country," he said.

He said the draft law, submitted to the Duma lower house of parliament on Thursday, received government backing on Monday.

It was unclear how the bill would affect Wal-Mart (WMT.N), Carrefour (CARR.PA) and other aspirants to Russia's retail market, one of the fastest growing in the world until the crisis and still lacking in modern, Western style shops.

Earlier versions of the bill were based on industry consultations between suppliers and food retailers, who escaped outright price controls in the draft [nL2906157].

Timofei Nizhegorodtsev, in charge of retail trade controls at the Anti-Monopoly Agency, said it had not advocated limits based on annual turnover.