* Opposition wants to lead independent government
* Yanukovich under pressure to name new PM, stabilise economy
* But wrong choice could spark more street unrest
By Richard Balmforth
KIEV, Feb 17 (Reuters) - Ukraine's opposition leaders on Monday pressed President Viktor Yanukovich to accept curbs on his powers that would allow them to form an independent government to defuse a 12-week stand-off on the streets and save the economy from collapse.
A government amnesty for activists detained during mass unrest came into force after protesters ended their occupation of Kiev's City Hall and other municipal buildings in the country.
But tension remained high with the opposition accusing Yanukovich and his allies of delaying discussion that could lead to his relinquishing what they see as "dictatorial" powers. They suspect him of trying to slow down the momentum of the protest movement.
But with foreign currency reserves depleted by repeated moves to prop up the weak hryvnia and fears of a devaluation growing by the day, Yanukovich is increasingly under pressure to name a new prime minister to replace the Russian-born Mykola Azarov, whom he sacked on Jan. 28.
His choice could speed up disbursement of fresh credits under a $15 billion bailout package from Russia - a quick fix for the heavily indebted economy. But if he resists calls for constitutional change and names another hardliner, the streets could return to uproar.
"People want a complete rebooting of the system, that's the main thing," said boxer-turned-politician Vitaly Klitschko, one of three opposition leaders who are pressing for a return to an old constitution that would remove presidential control of the government and the judiciary.
"We are being told that this constitution can only be drawn up by September. But we are in a critical situation when people are demanding to be heard immediately," he said on Monday at a meeting of parliamentary factions.
The unrest was sparked by Yanukovich in November when he spurned a free trade agreement long in the making with the European Union and opted for $15 billion in Russian credits and cheaper gas.
The revolt spiralled into countrywide protests at perceived sleaze and corruption in the Yanukovich administration, and has triggered a tussle between East and West.
As Russia beckons with the aid package, the United States and its Western allies have urged Yanukovich to move back towards an IMF-backed deal with Europe.
An amnesty came into force on Monday after scores of protesters, including a masked and club-wielding "self-defence' militia numbering about 100, ended a two-month occupation of city hall.
The amnesty, applauded by the European Union and the OSCE rights body, means that criminal charges will be dropped against those protesters for violations committed between Dec. 27 and Feb. 2.
That period includes a week of clashes in January involving radical activists in which six people were killed and hundreds of police and protesters injured.
Despite the conciliatory moves, the mood on the Maidan, the local name for Independence Square which is the focal point of the protests, remained truculent on Monday.
"I can't see that anything much has changed - people still want the leadership to go. And the amnesty law does not change anything. Parliament has got to understand that everything has to be changed - the constitution, the laws, the president and even the parliament," said Viktor Stelmakh, 45, from the Zhytomyr region west of Kiev.
"I don't want today's Yanukovich to be simply replaced by another new Yanukovich," he added.
At Kiev's main flashpoint near Dynamo football stadium, where three activists were killed in January in clashes with riot police, masked men manned barricades of tyres and sandbags across one end of the road leading to government HQ despite a partial passage for traffic being cleared on Sunday.
Western governments have expressed fears of an escalation of conflict and breakdown of law and order unless Yanukovich meets opposition demands.
Young club-wielding men in black balaclavas appear almost everywhere now in the city centre - even entering shops and fast-food eateries. Near the Dynamo stadium "front line", groups of men in paramilitary fatigues and hard hats can be seen marching and training together.
The hryvnia only slightly weakened on Monday after an overall slide in value of 7 percent since the beginning of the year, but prospects of a serious depreciation in its value sometime in the future appeared more and more likely.
"The basic factor weighing on the hryvnia today is the absence of trust and without the political crisis being solved it is difficult to assume there will be a growth of trust," said Glib Vyshlynsky of GfK, a market research company.
(Additional reporting by Pavel Polityuk and Natalia Zinets; Writing By Richard Balmforth; Editing by Giles Elgood)