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By Alexander Tanas
CHISINAU (Reuters) - Lawmakers voted to overhaul Moldova's electoral system on Thursday, as thousands of opposition activists massed outside saying the changes favoured the two largest parties.
A smaller group of activists rallied nearby backing the measures, which they say will bring voters closer to the people who represent them.
Prime Minister Pavel Filip pushed to replace the proportional electoral system with a mixed scheme which will let voters cast their ballot for constituency candidates as well as party lists.
Opponents said bringing in first-past-the-post voting will squeeze out smaller parties in the ex-Soviet country, and benefit the two main political players - the ruling pro-Western Democratic Party and the opposition pro-Moscow Socialists.
Both dominant parties have backed the changes in Europe's poorest country, where the European Union and Russia compete for influence.
The Venice Commission, a body which rules on rights and democracy disputes in Europe, has also raised concerns, saying individual constituency MPs could come under pressure from business interests. [nL8N1J30Q0]
Some protesters shouted "down with the mafia", as the measures passed with 74 votes in the 101-seat parliament.
Andrei Nastase, leader of the opposition Dignity and Truth Platform Party, accused the Democratic Party of colluding with the Socialists in a "cartel" to squeeze out other groups.
Parliament Speaker Andrian Candu said the law would pave the way for a new political class "which will allow people to put new and worthy people in parliament in 2018".
Moldova has seen three governments fall since 2015, after the disappearance of $1 billion from the banking system plunged the country into political and economic chaos.
Moldova goes to the polls next year, where the Democratic Party's coalition expects a tough contest with Socialists, whose leader was elected president in November.
(Writing by Matthias Williams; Editing by Andrew Heavens)