By Hugh Bronstein

BUENOS AIRES (Reuters) - Images of a former Argentine official in handcuffs after getting nabbed in the middle of the night trying to stash millions of dollars in a convent have thrown the country's political opposition into disarray, buying time for the new president to apply difficult austerity measures.

Mauricio Macri took office in December promising to revive Latin America's No. 3 economy after years of free-spending populism under his predecessor, Cristina Fernandez.

Food and home heating costs have skyrocketed since Macri devalued the currency and reduced energy subsidies. Thousands of protesters took to the streets this week, banging pots and pans in the first "cacerolazo" against his policies.

But Fernandez, a sworn Macri enemy who could run against him in 2019, has been unable to capitalize on the discontent.

She was embarrassed last month when her former secretary of public works Jose Lopez was arrested after throwing bags filled with almost $9 million over the walls of a convent in a Buenos Aires suburb.

Lopez started hurling the cash into the Our Lady of Fatima convent at 3 am when the elderly nuns inside were slow to answer the door. Prosecutors are probing long-standing links between Fernandez administration officials and the convent.

Lopez has been charged with money laundering and for bringing an unlicensed automatic rifle to the convent.

Coverage of the scandal has saturated the media, paralyzing the opposition as Macri grinds forward with investment-friendly policies he says will spark an economic recovery next year.

"The facts regarding previous corruption have bought Macri time," said local pollster Carlos Fara, adding that Macri has a positive image rating of 59 percent while Fernandez's has fallen to 36 percent from the 46 percent she had when she left office.

A convent security tape was released this month showing a nun finally opening the door for Lopez and accepting bags from him in the pre-dawn hours of June 14. Fernandez says any accusations of corruption against her are politically motivated and that she knew nothing about wrongdoing by Lopez.

The former president has a 44 percent unfavorable rating, up from 34 percent when she left office, said Mariel Fornoni, a director at polling firm Management & Fit

"The Lopez affair has hit Cristina hard, and given Macri some political breathing room to get through this period of outcry over the increase in public utility bills," said Fornoni.

Moderate Congressman and former presidential candidate Sergio Massa is expected to make a play to lead the opposition in the run-up to October 2017 legislative elections.

Massa has a more conciliatory approach than the fiery Fernandez and would be less likely to stonewall Macri's free-market reforms in Congress.

"The corruption cases have hurt Fernandez image while Massa's positive image has held steady at about 42 percent," said political analyst Rosendo Fraga.

But for the rest of this year, Macri's main worry looks to be a slower-than-expected economic recovery, rather than any one political rival.

Asked who was most likely to lead the opposition, he said. "For now? No one."

(Reporting by Hugh Bronstein)