* Phosagro seeks backing of Russian PM Putin for bid-Vedomosti
* Has set deals with Canadian banks for half of funding-paper
* Decision by Canada on BHP's bid due on Wednesday - source (Adds details from newspaper report, background)
MOSCOW, Nov 3 (Reuters) - Russian fertiliser company Phosagro is planning to bid for Canada's Potash Corp (POT.TO), the world's top fertilizer maker, rivalling a bid by BHP Billiton (BHP.AX) (BLT.L), business daily Vedomosti reported on Wednesday.
Phosagro Chairman Vladimir Litvinenko has asked Russian Prime Minister Vladimir Putin to approve a potential deal and request financing from Russian banks, the newspaper said, citing a letter from Litvinenko to Putin.
The news comes as Canada insisted on Tuesday it has made no decision yet on BHP's $39 billion offer for Potash, even as two newspapers said bureaucrats were advising the government to allow the bid and rumors swirled in the markets that Ottawa would block it. [ID:nN02206060]
The federal Canadian government will announce its decision on Wednesday, a source close to the matter told Reuters. Ottawa has until the end of Wednesday (0400 GMT Nov 4) to make its ruling public.
Vedomosti said it was unclear how much Phosagro planned to bid for Potash Corp.
It quoted Litvinenko as saying in the letter he knows well Canada's government officials who make decisions on the matter as well as Potash Corp's senior management and that they were not against an alliance with Russia.
Phosagro has also secured preliminary agreements with Canadian banks over providing half of financing needed for the deal, while Russian banks should provide the rest, the paper said.
Phosagro was not immediately available for comment.
Potash Corp said late last month its advisers had identified several potential buyers that could realistically make an offer to buy Potash Corp, competing with BHP Billiton's $39 billion bid. (Reporting by Maria Kiselyova; Editing by Muralikumar Anantharaman)