ATHENS (Reuters) - Greece approved a further relaxation of its capital restrictions on Friday as it makes headway on bailout-mandated reforms and confidence in its banking system returns.

Athens imposed capital controls last summer when it was embroiled in acrimonious bailout talks with its international lenders and almost toppled out of the euro zone. It has gradually eased the controls since then.

According to a ministerial decision published in the official Gazette on Friday, the cash withdrawal limit was changed to 840 euros every two weeks from the current cap of 420 euros a week.

People will also be allowed to withdraw money for loan repayments, while restrictions were lifted on withdrawals made in order to make new deposits.

For money transferred from foreign bank accounts to existing ones in Greece from Friday the withdrawal limit will be raised to 30 percent of the amount transferred from the previous 10 percent.

Greece's lenders have approved the latest easing of controls, a Bank of Greece official said on Monday.

(Reporting by Angeliki Koutantou; Editing by Hugh Lawson)