ATHENS  (Reuters) - Greece has softened its restrictive Sunday shopping rules as demanded by its lenders, but went back on plans for full liberalization after strong opposition by small retailers and the Orthodox Church.

In a move aimed at making its economy more flexible, Parliament passed on July 24 a law allowing retailers to stay open for business seven Sundays a year, up from currently two.

This would comply with the terms of Greece's 240-billion euro ($319 billion) international bailout.

More Sunday shopping is part of measures to boost Greece's ailing economy, which has shrunk by about a quarter since a debt crisis broke out in 2009.

Sunday shopping is expected to boost retail sales, the government said. It is fighting a severe economic crisis fuelled by record unemployment and austerity measures imposed by the country's international lenders.

"With this measure we want to revive the centres of big cities," Development Minister Costis Hatzidakis said.

But Hatzidakis gave up on a more ambitious plan to allow some stores to stay open every Sunday, bowing to opposition by small business unions, workers and the church.

The union of small Greek retailers ESEE said full liberalisation would fail to boost sales and instead just raise operating costs by a quarter.

"It would be a zero-sum game, because some shops' gains would mean losses for other, smaller players who would lose market share to the big ones", said ESEE Vassilis Korkidis.

Greece's influential Orthodox church also objected to scrapping the Sunday holiday, saying this day should be strictly reserved for rest and religious duties.

"Sunday is dedicated to God. Sunday should be a holiday to give Christians the chance to worship their God and rest after a week-long labour," the Holy Synod, the Greek church's governing body has said.

(Reporting by Angeliki Koutantou; Editing by Toby Chopra)