* Activists moved into Kiev city hall in early December
* They expect criminal charges dropped against activists
* Opposition demands curbs on Yanukovich's presidential powers (Adds opposition demands, riot police pull back)
By Richard Balmforth
KIEV, Feb 16 (Reuters) - Ukrainian anti-government protesters ended a two-month-old occupation of city hall in the capital Kiev on Sunday to meet an amnesty offer aimed at easing a stand-off over President Viktor Yanukovich's rule.
The authorities, for their part, withdrew riot police from a flashpoint district of the city, near the Dynamo Kiev football stadium, where at least three protesters died in January in violence between ultra-radical activists and police.
Despite the conciliatory moves on both sides, opposition leaders sought to keep up pressure on Yanukovich, telling a rally of supporters in Kiev's Independence Square that he must abandon "dictatorial" powers and allow them to form a government which would be independent of him.
But tension still simmered in the city ahead of a parliament session next Tuesday when Yanukovich may present his candidate for prime minister - a move that will show the extent to which he is ready to make further concessions to the opposition after 12 weeks of often ugly street confrontation.
The unrest was sparked by Yanukovich in November when he spurned a free trade agreement long in the making with the European Union and opted for a $15 billion package of Russian credits and cheaper gas to shore up Ukraine's ailing economy.
The revolt spiralled into countrywide protests at perceived sleaze and corruption in the Yanukovich administration and has triggered a geopolitical tussle between East and West.
As Russia beckons with a $15 billion aid package to plug holes in Ukraine's heavily-indebted economy, the United States and its Western allies have urged him to move back towards an IMF-backed deal with Europe.
At least six people have been killed and hundreds of people - police and protesters - injured in the bloodshed.
As Sunday's peaceful rally unfolded on Independence Square, attracting several thousand, young club-wielding masked men from the radical fringe of the protest movement were on patrol, looking for government agents known locally as "titushki".
A detail of about 40 young men, wearing black balaclavas and carrying shields that announced they were from the 14th "self-defence" unit, marched through crowds gathered near the Dynamo Kiev football stadium, Kiev's unrest "front-line".
On Saturday, at the other end of the city, several men who protested against barricades in the city emerged with bloodied faces after clashes with local "self-defence" units.
Against this background, Western governments have expressed fears of an escalation of conflict and breakdown of law and order unless Yanukovich meets opposition demands.
On Sunday, former economy minister Arseny Yatseniuk repeated calls for constitutional changes that would strip Yanukovich of powers he has accumulated and allow for the formation of an opposition government that could lead the former Soviet republic to economic recovery.
After protesters departed Kiev's City Hall - which they had occupied since early December - Yatseniuk called on Ukraine's judicial authorities to live up to their promise and drop all criminal charges against protest activists.
AMNESTY DEAL
Demonstrators had swept into the main municipal building as popular revolt took off against Yanukovich's decision to ditch the EU trade pact in favour of a more immediately lucrative deal with Russia, Ukraine's former Soviet master.
Under an amnesty arrangement, Ukrainian authorities have offered to drop all criminal charges against activists who have been provisionally freed as long as municipal buildings are cleared of protesters and some main roads unblocked by Monday.
"We want about 2,000 criminal cases to be dropped. If this does not happen, we will start a peaceful offensive," Yatseniuk declared.
Masked men in military fatigues and the demonstrators they had protected against riot police since mid-December filed out of Kiev city hall on Sunday but threatened to return if authorities did not carry out the amnesty promise.
Opposition deputies said protesters had similarly pulled out of municipal buildings in several areas of western Ukraine, a hotbed of opposition to Yanukovich, and in one part of the southeast where the president has retained more support.
Andriy, 45, commander of about 100 men in black balaclavas who filed out of City Hall, said the building was being cleared on the understanding that charges would be dropped against activists who had been earlier detained by police.
Asked what he and his men would do if the authorities did not fulfil their promise, he replied: "Then we'll come back."
Opposition sources said protesters had further agreed to ease blockages of traffic on a through road leading to government headquarters and parliament, but that barricades would largely remain in place.
A pivotal decision in coming days will be who Yanukovich names as his candidate for prime minister to replace the Russian-born Mykola Azarov, whom he sacked on Jan. 28 in an unsuccessful attempt to appease the protesters.
He has until the end of the month to reach a decision although parliament speaker Volodymyr Rybak was quoted by Interfax on Friday as saying he thought Yanukovich might present his choice to parliament next Tuesday.
His choice could decide more credit coming quickly on stream from Russia under the bailout package. But if he resists calls for constitutional change and names a hardliner the situation could turn explosive on the streets again. With the hryvnia under devaluation pressure, he has to find a new steward of the economy quickly.
(Additional reporting by Pavel Polityuk; Editing by Mark Heinrich)
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