* Anti-Roma protests scale down
* Some 400 arrested since weekend clash with Roma
* Highlights tensions before presidential vote (Adds new wave of protests)
By Irina Ivanova and Tsvetelia Tsolova
SOFIA, Sept 28 (Reuters) - Several hundred young Bulgarians rallied for a third night in major cities on Wednesday to protest against the Balkan country's large Roma minority, but the demonstrations remained largely peaceful.
The rallies were in sharp contrast to those on Tuesday when hundreds of youths, frustrated by a lack of jobs and what many describe as a climate of impunity for organised criminals, took to the streets and some 160 were arrested.
About 400 people have been arrested in the country's worst unrest in 14 years. The violence began at the weekend, when residents of Katunitsa, 160 km (100 miles) east of Sofia, blamed Roma leader Kiril Rashkov for the death of a 19-year-old and set alight several of his houses and cars.
Many of the protesters have been released and some were fined for public order offences.
Police said on Wednesday that Rashkov, 69, known as Tsar Kiro, had been arrested and charged with making a murder threat.
In the capital, about 100 people marched past the parliament building on Wednesday night, carrying national flags and singing nationalist songs. In the Black Sea city of Varna, 50 bikers laid flowers in front of the cathedral to commemorate the man's death.
Some 300 people gathered in the central city of Asenovgrad demanding justice over the death of the young man and saying their rally was not against the Roma but against state institutions which failed to impose a strict rule of law.
The unrest has drawn attention to the tensions in the European Union's poorest country as it struggles with the effects of a deep recession.
"Gypsy terror: How long will it take, how long we will be quiet!" read a banner at one of the demonstrations on Tuesday.
"We have more obligations -- we pay our taxes, we behave normally -- while they (Roma) have more rights," Maria Borisova, who attended Tuesday's protest in Sofia, told bTV channel.
The unrest was Bulgaria's worst since 1997, when an economic crisis and hyperinflation brought people onto the streets in protest, though there has been some violence against the country's Muslim minority this year.
Bulgaria, which holds a presidential election next month, has failed to reap some of the rewards of EU membership, having been barred from the passport-free Schengen zone because of high levels of corruption.
"There is a risk of escalation (of tension) -- we are in a pre-election period," Deputy Interior Minister Veselin Vuchkov was quoted as saying by state news agency BTA, adding that police had stepped up security.
The chief prosecutor has called for the rapid arrest of people who incite racial and ethnic tension. Roma make up five percent of the 7.4 million population, and Muslims, many of them ethnic Turks and some also Roma, account for 10 percent.
"PURELY RACIST"
Roma are a significant minority across central Europe and a lack of integration in countries like Romania, Bulgaria, Hungary, the Czech Republic and Slovakia prompts regular flashpoints and feeds support for far-right political parties.
In Bulgaria, the right-wing Attack party has only about 4 percent support but is a key partner of the ruling GERB party.
Many Roma try to move west, but this led to a wave of deportations from western Europe, especially France, last year.
The Ombudsman, Konstantin Penchev, said the protests had taken a more sinister turn since the weekend.
"People in Katunitsa took to the streets for a just reason, against an oligarch living above the law," Penchev said. "In the streets of the big cities, people went out with quite different slogans -- not against the oligarchy but purely racist."
Many Bulgarian Roma, who live in big city ghettos, often in homes without running water, fear attacks and stopped their children going to school for a third day on Wednesday.
In the southern city of Dimitrovgad, Roma armed with axes and knives stayed up all night guarding their homes, and families slept outside fearing attacks on their buildings.
"Roma integration is an old topic. Many governments have done almost nothing about it over the last 20 years and more, now it must be made a priority," said Rosen Plevneliev, a close ally of Prime Minister Boiko Borisov and favourite to win the Oct. 23 vote for the largely ceremonial presidency. (Writing by Sam Cage; Editing by Tim Pearce)
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