* Putin's longtime "grey cardinal" is back in the Kremlin
* Seen as bid for more balance in Putin's inner circle
* Limited role gives Surkov a foot in the door again (Adds detail, context, speculation on Ukraine role)
By Steve Gutterman
MOSCOW, Sept 20 (Reuters) - President Vladimir Putin named his former deputy chief of staff Vladislav Surkov as an aide on Friday, bringing back the creator of modern Russia's tightly controlled political system just four months after he quit the government in a power struggle.
Surkov's return is likely to be seen as an effort by Putin to strengthen the more liberal camp in his Kremlin inner circle and balance out hawks who have seemed dominant since the former KGB spy began a third presidential term last year.
He was pushed from the Kremlin in 2011, after street protests against the system he helped create, and spent a year in government as a deputy prime minister before quitting in May after a dispute with investigators looking into suspected fraud.
His departure from the Kremlin administration was seen as a move to appease protesters itching for a stronger political voice, and his exit from Prime Minister Dmitry Medvedev's cabinet was widely seen as a victory for conservatives.
The "grey cardinal", so called because of the influence he wielded behind the scenes, helped build what is known as "sovereign democracy" and, as Putin's top political aide, concentrate power in the president's hands in his first, 2000-2008 term.
His sway may not be so strong this time around.
Putin's decree did not specify Surkov's responsibilities, but his spokesman, Dmitry Peskov, told Ekho Moskvy radio he would advise the president on aid to the Moscow-backed breakaway Georgian regions of Abkhazia and South Ossetia, which Russia recognised as independent after a brief 2008 war with Georgia.
SURKOV THE SURVIVOR
However, the appointment gives Surkov, who turns 49 on Saturday, access to Putin's ear early in a six-year term that the 60-year-old has said may not be his last.
Appointed to the presidential administration in 1999, Surkov helped engineer the handover of power from Boris Yeltsin on the last day of that year, then stayed on through Putin's first two terms and most of that of Dmitry Medvedev, steered into the Kremlin in 2008.
While his duties on the surface appear limited to a small slice of foreign policy, many Russians find it hard to imagine a man both allies and foes have described as a puppet master keeping his hands out of domestic politics.
Putin likes to maintain a balance of forces around him and often rotates people he trusts into different jobs. He has a limited pool to pick from, and senior officials who quit or are dismissed rarely then openly oppose Kremlin authority.
His appointment could be meant to take Kremlin conservatives down a peg at a time when small gestures toward opponents suggest Putin is thinking hard about how to ensure political stability in a tough economic climate.
With hard-nosed Vyacheslav Volodin in the post his subtler rival Surkov once occupied, Putin has championed conservative values and what Kremlin critics say is a clampdown on dissent through restrictive laws and court cases against opponents.
While Putin faces no imminent threat to his rule, a strong showing for opposition leader Alexei Navalny in a Moscow mayoral election seem to have deepened debate in the Kremlin about whether to ease up on opponents.
Some analysts speculated Surkov's advisory duties would be broadened to include ties with Ukraine, a big neighbour Putin is struggling to keep from signing agreements with the European Union that would wrest it further from Russia's orbit.
Surkov could not be reached for comment.
He replaces Tatyana Golikova, a former health minister. Her appointment as head of the Audit Chamber, a financial oversight body, was confirmed by parliament on Friday. (Editing by Louise Ireland, Douglas Busvine and Sonya Hepinstall)