WARSAW, July 13 (Reuters) - Poland risks undermining trust in state institutions by weakening the independence of the judiciary, leading European rights body the OSCE said on Friday.

Poland's ruling nationalists are under fire from the European Union and domestic political opponents for a broad judicial overhaul that Warsaw says is needed to make Polish courts more efficient and rid them of the vestiges of communism.

Others say the changes weaken the rule of law in the largest ex-communist EU state by putting judges and courts under more direct political control. PiS has also tightened rules around other democratic pillars the media and non-governmental groups.

"It's creating a lot of uncertainty and this can undermine the trust in the judiciary," said Ingibjorg Gisladottir, head of the OSCE's Office for Democratic Institutions and Human Rights (ODIHR) told Reuters.

"Trust is a glue in every democratic society."

The Organization for Security and Cooperation in Europe (OSCE) brings together 57 countries including Poland. It has said the Polish government's moves raise serious concerns about upholding key democratic principles including the separation of powers and the independence of the judiciary.

With international criticism growing and street protests at home, the Polish government has not changed tack even though it risks losing billions of euros in aid from the European Union, which has expressed similar worries to the OSCE.

"Imagine it in a family. What will happen if they don't trust each other?," Gisladottir said in an interview. "Without trust, it is totally unpredictable what will happen."

"That's a really difficult situation to be in. People would know it in their own personal life -- if they cannot trust their partner... the quality of their lives would definitely be lesser. The same applies to society." (Reporting by Gabriela Baczynska and Erika Yip; Editing by Catherine Evans)

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