KUALA LUMPUR, June 18 (Reuters) - Malaysia's independent power producer, YTL Power International Bhd YTLP.KL , said on Wednesday it will not take part in a 3 billion ringgit ($932.55 million) power plant project, amid criticism over its winning of the government contract.

The contract, called Project 4A, was awarded in May 27 to YTL Power and national utility Tenaga Nasional Bhd TENA.KL through direct negotiation instead of competitive bidding.

"In view of the misconception over the project, YTL Power has decided not to participate in the project under the present arrangement to dispel any misgivings over the government's commitment to transparency and good governance," the company said in a statement.

Shares of YTL Power and its major shareholder, YTL Corp Bhd

YTLS.KL , fell over the past week as criticism grew over the government's handling of the contract to develop the 1,000-1,400 MegaWatt combined cycle power plant in the southern state of Johor.

Labour unions have urged Tenaga Nasional to cease all ties with YTL Group, a power-to-construction conglomerate controlled by one of Malaysia's richest men, Yeoh Tiong Lay.

($1 = 3.2170 Malaysian Ringgit)

(Reporting by Yantoultra Ngui; Editing by Stephen Coates)

((yantoultra.ngui@thomsonreuters.com)(+60323338036)(Reuters Messaging: yantoultra.ngui.thomsonreuters.com@reuters.net))

Keywords: MALAYSIA YTL POWER INT/