* Opposition condemns appointment of Peevski, seeks new vote
* President urges MPs to reconsider, calls crisis meeting
* Shadowy political-business networks mar Bulgaria's image (Adds president, British ambassador's comment)
By Tsvetelia Tsolova
SOFIA, June 14 (Reuters) - Bulgaria's parliament on Friday appointed a media magnate to oversee its state security service, a move that could rekindle popular discontent, threaten fragile stability after an early election and alienate European partners.
Political analysts said the move was another example of Bulgaria subjecting state institutions to private interests and could worsen the international reputation of the European Union's poorest country for poor governance.
Post-communist governments in Bulgaria have failed to cut mutually advantageous links between politicians and businessmen, deterring foreign investment and keeping the Balkan country under strict EU monitoring and outside the passport-free travel Schengen zone ever since its 2007 admission to the bloc.
Legislators from the ruling Socialists and the allied ethnic Turkish MRF party endorsed Delyan Peevski, also an MRF deputy, for the security chief post by a simple majority without debate.
They acted hours after legal changes stripping the president of his power to appoint heads of secret services took effect.
The opposition centre-right GERB party, which lost an early election last month after its government was toppled by mass protests against depressed living conditions, demanded new elections, saying parliament's decision was "ridiculous".
GERB officials said it would undermine the trust of Western security services with which Sofia cooperates.
President Rosen Plevneliev exhorted parliament to reverse the decision, calling it wrongheaded, and called an extraordinary sitting of the national security council next week to discuss Peevski's appointment.
"NEGATIVE CONSEQUENCES"
Plevneliev signed legislation removing the power of his office to appoint security chiefs, in the hope that putting this in parliament's hands would ensure more debate and transparency when choosing such senior officials.
But he told reporters on Friday that the vote for Peevski "has nothing to do with the promise to the Bulgarian people and to me personally of ... transparency. This is a decision with longstanding negative consequences for Bulgaria."
In 2007, Peevski was sacked as a deputy minister of the then-Socialist-led administration in a corruption scandal. But the investigation against him was later dropped and he was reinstated in the post.
Bulgarian media said Peevski stood behind a powerful network of national newspapers and television channels owned by his mother and which had been previously criticised for concentrating media ownership in the hands of a few.
British Ambassador Jonathan Allen tweeted: "The appointment has been rushed through with no hearings, debate or opportunity to find out about the candidate. Why?
"... Head of DANS (security agency) incredibly sensitive position for Bulgaria and international partners. Need someone of highest integrity, trust and confidence," Allen said.
Some leaders of February's wave of unrest left a meeting with Prime Minister Plamen Oresharski on Friday and called for new demonstrations, calling the appointment "a mockery" of their demands for more transparency.
Oresharski defended parliament's decision, saying Bulgaria needed to take serious steps to stop organised crime and smuggling and Peevski was best suited for the job - although he lacks direct experience in the field.
"Peevski was chosen because he is not part of the system and we deliberately looked for such an external specialist so that he can restructure it," Oresharski told reporters.
He said several candidates were discussed internally but only Peevski's name was nominated and voted on in parliament in a process that took 15 minutes. (Editing by Mark Heinrich)
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