CORRECTED - UPDATE 2-Barclays capital raising plan under fire again

(Corrects to show Middle East capital raising amount is $5.8 billion, not $5 billion, in paragraph 4)

* PIRC says capital-raising would dilute existing investors

* Calls for "unequivocal message" of opposition

* Barclays shares down 0.6 pct in weaker market

By Myles Neligan

LONDON, Nov 17 (Reuters) - Corporate governance advisers PIRC called on shareholders in British bank Barclays Plc (BARC.L) to vote against the lender's plan to raise 7 billion pounds ($10.4 billion) from private investors.

The capital raising plan would significantly dilute the holdings of existing shareholders, and has no advantage over the British government's publicly-funded rescue package for the banking sector, PIRC said in a statement on Monday.

"At least a part of the company's investor base should send a clear, unequivocal message that they do not think this was a good solution to the bank's current situation, and that it has come at a heavy price for existing shareholders," PIRC managing director Alan MacDougall said.

Barclays is planning to raise a total of 7 billion pounds, including 5.8 billion pounds from investors in Abu Dhabi and Qatar, through the sale of complex capital instruments.

Under the plan, the Middle Eastern investors are set to receive 3 billion in so-called reserve capital instruments, carrying an annual interest rate of 14 percent, which were not offered to existing shareholders.

Critics of the plan, drawn up by Barclays as a means of raising capital without potentially compromising its operational independence by accepting government funds, say it does not allow existing investors to participate on the same terms and is more expensive than taking the government's cash.

Last week, the Association of British Insurers, which represents about a fifth of UK shareholders, gave the fundraising plan an "amber" rating, reflecting concerns some investors had about the cost of the package in terms of dilution and fees.

PIRC, which advises fund managers and pension funds with combined assets of 1.5 trillion pounds, said on Monday it was not worried that the government might try to influence banks taking part in the publicly funded bailout programme.

"PIRC does not believe that the deal represents an improvement over the option of raising capital from the Treasury, and in light of recent developments, does not share the company's concerns about state interference in the bank's operations if this option had been taken," it said.

However, PIRC's MacDougall said the capital plan would probably survive the shareholder vote, scheduled for Nov. 24.