Malaysia's Felda to buy 37 pct stake in Eagle High Plantations for $505.4 mln

* Felda says deal will give it access to more land in Indonesia

* Its FGV unit scrapped similar plan in 2015 (Updates with quotes, background)

KUALA LUMPUR, Dec 23 (Reuters) - Malaysia's state-owned Federal Land Development Authority (Felda) has agreed to buy a 37 percent stake in Rajawali Group's PT Eagle High Plantations Tbk, one of Indonesia's largest palm oil companies, for $505.4 million.

The acquisition plan comes a year after Felda's main listed unit Felda Global Ventures Holdings Bhd (FGV) scrapped a plan to buy a similar stake in Eagle High for $680 million. Politicians and investors blasted the deal then as too expensive.

Felda said in a statement that the acquisition - which will be done through its subsidiary FIC Properties Sdn Bhd - will give it access to more than 320,000 hectares of land in Indonesia, including more than 125,000 hectares of planted area.

The acquisition will also help Felda and its associate companies make further inroads into the lucrative and expanding domestic market in Indonesia, it said.

Felda, which aims to become one of the world's largest palm oil groups, said it needed to "venture into new frontiers" to grow as additional plantation land in Malaysia was becoming scarce.

"The investment in a major palm oil player in Indonesia will act as an impetus and further cement stronger bilateral ties between Malaysia and Indonesia to move forward the agenda of the recently established Council of Palm Oil Producing Countries (CPOPC) of which both are founding members," Felda said.

People familiar with the matter told Reuters in February that instead of using the listed FGV, Felda would use an unlisted unit to buy the stake in Eagle High, and that it was seeking to cut the price by as much as 30 percent.

Tycoon Peter Sondakh, who controls Rajawali, has long-standing ties with Malaysian Prime Minister Najib Razak. Both Najib and Sondakh have said that the deal was commercially driven.

FGV shares tumbled 5.6 percent on Friday to their lowest in three weeks after Malaysia's Employees Provident Fund - one of its top ten shareholders - sold its entire stake in the firm.

Shares of Eagle High jumped as much as 8.8 percent to the highest in almost eight months on Friday. (Reporting by Liz Lee, Eveline Danubrata; Editing by Christian Schmollinger and Adrian Croft)