India's ruling party frets over growing dissent against Modi

* Modi in Britain, meeting queen and addressing huge crowd

* Back in India, troubles grow with criticism from allies

* PM's aides reach out to handful of prominent rebels

* Leader abroad for much of November

By Rupam Jain Nair and Andrew MacAskill

NEW DELHI, Nov 13 (Reuters) - Senior (Other OTC: SNIRF - news) leaders from India's ruling party are growing uneasy about an internal rebellion against Prime Minister Narendra Modi's leadership style, which has punctured his aura of invincibility and threatens to weaken him further.

While the 65-year-old, who swept to power last year on a wave of optimism over economic reforms, lunched with Queen Elizabeth during a high-profile, three-day visit to Britain, his lieutenants are working to keep a lid on problems at home.

One is a revolt among a handful of senior members of his nationalist Bharatiya Janata Party (BJP (Shanghai: 600578.SS - news) ), the first time allies have openly questioned the direction of a leader who captured power to a degree last seen when Indira Gandhi ruled India with a firm hand.

A cabinet minister and two BJP leaders told Reuters they agreed with comments made by party elders earlier this week questioning Modi's stewardship, after a second straight regional election setback.

Tuesday's statement by four party elders zeroed in on the centralised leadership style of Modi.

He has been accused of undermining politicians in his party by acting as chief campaigner in local elections, and bypassing cabinet colleagues by making decisions for them.

"It (Other OTC: ITGL - news) is clear that the unrest is more widespread," said one BJP leader, who asked not to be named because of the sensitivity of the matter. "The problem is Modi has been governing this way for so long, he probably can't, and won't change that style."

Doubts around Modi's leadership raise questions about the viability of his plans to transform the world's largest democracy into a global power and close the development gap with China.

"Modi needs to delegate more responsibility, otherwise there will be more and more problems," said S (Other OTC: UBGXF - news) . Chandrasekharan, director of the South Asia Analysis Group in New Delhi.

"He needs to undergo a course correction, or the resentment will start to build, and have an impact his ability to govern."

REACHING OUT

BJP sources said the leadership was reaching out to party veterans, including former deputy Prime Minister L.K. Advani, who publicly demanded that leaders be held responsible for their election defeat in the pivotal and populous state of Bihar.

Advani was one of four former ministers to author the strongly-worded statement, indirectly accusing Modi and party President Amit Shah of holding too much power.

The BJP has asked those leaders not to embarrass the party further and to discuss the issues in private, the sources said.

"It would have been better if these issues were raised in the party forum rather than in public," Parliamentary Affairs Minister Venkaiah Naidu said on Friday.

A federal minister acknowledged that Modi needs to listen to more voices to avoid a widening rebellion.

"There is a logic in what the elders of the party pointed out," the minister said. "The party realises the value of their observations and we started a discussion to find solutions."

Modi will be out of India for much of the remainder of November as he travels to the G20 summit in Turkey this weekend and then has trips planned to Malaysia, Singapore and finally France for a climate change summit.

A second BJP leader said there was little chance of an attempt to unseat Modi, who remains by far the party's most popular leader.

But the recent election defeat means the BJP is unlikely to be able to secure control of parliament in this five-year term.

This is significant, because Modi's economic reform agenda is being blocked in the upper house, where his party is in a minority, and seat allocations are dependent on parties' strength in the states.

Reforms thwarted so far include the biggest overhaul of taxes since independence in 1947 and a business-friendly land bill.

"This election brings a sense of realism. You should never think you are invincible," the second BJP leader said. "It is going to be a tough road ahead." (Editing by Mike Collett-White)