* Journalists no longer need to submit reports to censors
* Self-censorship likely as reporters take cautious approach
* Privately dailies still banned (Adds U.S. reaction, paragraphs 10-11)
By Aung Hla Tun
YANGON, Aug 20 (Reuters) - Myanmar abolished direct media censorship on Monday, the latest dramatic reform by its quasi-civilian regime, but journalists face other formidable restrictions including a ban on private daily newspapers and a pervasive culture of self-censorship.
Under the new rules, journalists no longer have to submit reports to state censors before publication, ending a practice strictly enforced during nearly half a century of military rule that ended in March last year.
"This is a step in the right direction and a good approach, but questions of press freedom will remain," said Aung Thu Nyein, a senior associate at the Vahu Development Institute, a Thailand-based think tank.
"We can expect the government to still try to assert some control, probably using national security to keep the media in check," he added.
Previously, every song, book, cartoon, news report and planned piece of art required approval by teams of censors rooting out political messages and criticisms of one of Asia's most repressive governments.
Changes have gathered steam since June last year when the Ministry of Information decided to allow about half of Myanmar's privately run weekly journals and monthly magazines to publish without submitting page proofs to a censorship board in advance.
On Monday, restrictions were lifted on the remaining 80 political and six religious journals, said Tint Swe, head of the press censorship board at the Ministry of Information.
Over the past year, Myanmar, also known as Burma, has introduced the most sweeping reforms in the former British colony since a 1962 military coup. A semi-civilian government, stacked with former generals, has allowed elections, eased rules on protests and freed dissidents among other changes.
Newspapers have since been testing the boundaries, often putting opposition leader Aung San Suu Kyi on front pages and giving coverage to government critics. Editors say this was unthinkable before the middle of last year.
The United States, which has quickly improved ties with Myanmar as the reforms gather pace, said the end of direct censorship was another positive step.
"That said, the Censorship Board itself has not been eradicated, which obviously is a step that we would like to see the government take," State Department spokeswoman Victoria Nuland told a news briefing.
But while the authorities can no longer count on the same strictly controlled media that was ranked 169th of 179 nations last year in a global press freedom index by anti-censorship group Reporters Without Borders, significant restrictions remain.
Privately run daily newspapers are still not permitted, leaving a monopoly to state-run papers filled with propaganda. It was only last year that they dropped back-page banners attacking Western media for "sowing hatred".
Asked about the chance of ending a ban on private dailies, Tint Swe said: "We can say it has become closer than before. It could happen after enacting the necessary media law."
Journalists also said they still feared their reports could fall foul of various laws on the statute book, especially when covering issues deemed sensitive to national security.
In June, for instance, Reporters without Borders criticised a threat by Yangon chief minister Myint Swe to prosecute news media covering sectarian violence in the country's western Rakhine state, saying it highlighted "the fragility of recent improvements in media freedom".
"There will be more responsibilities on the editors since there are some existing laws under which action can be taken against journalists for their writing," said Wai Phyo, chief editor of the Weekly Eleven journal.
Remaining Orwellian laws include the Electronic Transaction Law, enacted in April 2004. It says "whoever receives or sends or distributes any information relating to secrets of the security of the state" can face up to 15 years in prison.
The definition of state secrets has been applied loosely in the past. At one point, it included any reference to the amount of money in circulation in Myanmar. Prominent activists such as Buddhist monk Shin Gambira were jailed under that law during a 2007 crackdown on monk-led protests.
With that law in place, media will still be choosing their words carefully, likely adopting the kind of self-censorship in place in other parts of Southeast Asia. In Singapore, for instance, media is usually careful to avoid displeasing the government and not falling afoul of strict libel laws.
Zaw Htike, a senior reporter and secretary of the Myanmar Journalists Network, which has more than 200 members, had a similar view, and added that journalists would now have to take more responsibility for what they wrote.
"I believe we also need to promote a code of ethics among journalists," he said. (Additional reporting by Martin Petty in Yangon; Writing by Alan Raybould; Editing by Jason Szep, Robert Birsel and Philip Barbara)
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