(Recasts throughout, previous MOSCOW)

By Daria Sito-Sucic

SARAJEVO, Oct 31 (Reuters) - Major powers overseeing Bosnia's postwar recovery on Wednesday told Bosnian Serbs to respect the U.N. envoy's ruling on ethnic voting, which is aimed at bringing the country closer to the European Union.

Russia joined its Western partners in endorsing envoy Miroslav Lajcak, but criticised the timing of his changes to the rules on legislative quorums, saying he was ignoring an "atmosphere of growing tensions in the Balkans".

Lajcak this month took measures to break legislative deadlock between the country's two autonomous halves, the Serb Republic and the Muslim-Croat federation, which were blocking the reforms Bosnia needs to get closer to EU membership.

But his move infuriated the Bosnian Serbs and their backer Serbia, which accused the envoy of trampling on Serb rights.

The Peace Implementation Council (PIC), the body set up to supervise the workings of the Dayton peace accords that ended Bosnia's 1992-95 war, supported Lajcak in his bid to create a more functional state.

"Decisions of the High Representative must be fully respected and promptly implemented. In particular, the PIC Steering Board calls upon Serb Republic leaders to abide by their obligations," the PIC said.

In a note to the PIC statement, however, the Russian delegation criticised the timing of the move, saying it was essential that Bosnian institutions be improved "in a more stable context" -- a clear reference to the trouble brewing over Kosovo.

NO LINKAGE, PLEASE

Western diplomats fear a spillover of instability from the dispute between Serbia and its breakaway Kosovo province, which also pits Moscow, as Serbia's protector, against the West which backs Kosovo's 90 percent Albanian majority.

A warning by Serbian Prime Minister Vojislav Kostunica last week of an "open threat to the essential interests of the Serb people" linked the dispute in Bosnia to that over Kosovo.

Serbia says that if the West goes ahead with its plan to give Kosovo independence, contrary to a long-standing U.N. resolution, it would also be undermining the Dayton accords which guarantee the autonomy of Bosnia's two halves.

Western ambassadors, responding to an implicit threat to back the secession of Bosnia's Serb half if Kosovo wins independence, warned Belgrade this week that the two issues cannot be linked.

Bosnian Serb leaders have suggested in the past that a declaration of independence by Kosovo in the coming months could trigger demands in their republic to secede from Bosnia and join a greater Serbian homeland.

Russia, a traditional Serbian ally, supports Belgrade in its battle to prevent Kosovo independence. But until this week, it had kept fully in step with the West on Bosnia.

Bosnia's two ethnic-based halves have had an uneasy, often hostile relationship and the Bosnian Serbs view Lajcak's measures to amend voting as a threat to their autonomy.

"Reactions to my decisions are out of proportion and have caused an artificial crisis that could stop any progress," Lajcak told a news conference in Sarajevo.

"I am ready for dialogue but nobody is going to blackmail me."

NATO, which had peacekeeping troops in Bosnia until it was replaced by an EU force in 2005, also backed Lajcak.

"Rather than questioning the Dayton Accord, Bosnia's politicians, in particular leaders of the Serb Republic, should abide by their obligations and take concrete steps to improve the functioning of the state," NATO Secretary General Jaap de Hoop Scheffer said in a statement in Brussels. (Additional reporting by David Brunnstrom in Brussels)

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