* Putin has yet to sign bill that critics call homophobic
* Berlin criticises Russia, despite important economic ties
Germany has condemned a new Russian law banning homosexual "propaganda", with Foreign Minister Guido Westerwelle - himself gay - saying on Wednesday that attempts to stigmatise same-sex relationships had no place in a democracy.
The strong words from Berlin reflect growing unease with Moscow's record on human rights and Chancellor Angela Merkel's willingness to openly criticise it, despite Russia's vital importance as an energy exporter.
Critics say the new bill, which bans the spreading of "propaganda for non-traditional sexual relations" to minors and sets fines, will in effect ban gay rights rallies and could be used to prosecute anyone actively supporting them.
"Foreign Minister Westerwelle is very worried about this law," his ministry said in a statement.
"The deliberate stigmatisation of same sex relations and the threat of prosecution has no place in a society which claims to be modern and democratic."
Foreigners found to have broken the new law can be deported from Russia, in addition to being fined up to 100,000 roubles or held for up to 15 days.
Merkel's spokesman said the law contradicted the spirit of Russia's obligations under human rights conventions.
The chancellor expressed her concern about domestic developments in Russia to Vladimir Putin as recently as April, when they met in the German city of Hanover, including the way the state treats homosexuals, Merkel's spokesman said.
"We are not giving up hope that the Russian government and Duma will revoke this measure. In any case, Germany will keep this issue on the agenda," he added.
The bill, passed by the lower house on Tuesday, still needs the approval of the upper house and Putin's signature.
Putin has championed socially conservative values since the start of a new term last year and embraced the Russian Orthodox Church as a moral authority. Some rights groups worry that anti-gay crime in Russia is becoming a bigger problem.
Putin, who was greeted at a German trade fair by a topless protest by the women's rights group Femen, said on that occasion that he did not discriminate against gay people.