By Nate Raymond and Jonathan Stempel

NEW YORK, Dec 29 (Reuters) - Argentina is urging a U.S. appeals court to reverse an order requiring the country to pay $1.33 billion to creditors who did not participate in its two debt restructurings, a legal case that could have huge ramifications for global debt markets.

Lawyers for Argentina's government said in court papers filed late on Friday that a trial judge was "wrong to ignore the chorus of voices" who opposed his November order on payments to so-called "holdout" creditors.

Those payments, to a court-controlled escrow account, would threaten the service of $24 billion in restructured debt, Argentina's lawyers wrote in papers filed in the 2nd U.S. Circuit Court of Appeals in New York.

"There is no authority permitting a U.S. court to order a sovereign to bring its immune assets into the United States in order to 'turn over' or distribute them to its creditors," lawyers for the Argentine government said in the 69-page filing.

The appeals court is expected to decide next year whether to force Argentina to pay the $1.33 billion to investors in the defaulted debt. The decision could have broad impact on the ability of governments to raise money by selling bonds and on strained countries' response to economic crises.

The case stems from Argentina's $100 billion sovereign debt default 11 years ago. Argentina is trying to avoid paying the holdout creditors, who refused to take part in massive debt restructurings in 2005 and 2010.

About 92 percent of the bonds were restructured, giving holders between 25 cents and 29 cents on the dollar.

But the holdouts, led by Elliot Management Corp affiliate NML Capital Ltd and the Aurelius Capital Management funds, demanded to be paid in full. Argentina calls the holdouts "vultures" and has resisted.

In the papers filed on Friday, Argentina said it is willing to resolve the litigation by reopening the restructuring offer, a move that would require legislative permission but that would likely be rejected by plaintiffs.

"The executive is prepared to once again present to Congress a proposal that definitively treats all holdout creditors on the same terms as participants in the Republic's 2010 exchange offer," the filing says.

"The Republic has already made two debt restructuring offers that plaintiffs chose to reject. It cannot present a proposal that treats holdout creditors better than exchange bondholders."

LONG-RUNNING CASE

In a separate court filing, lawyers for holders of restructured bonds said that holdouts should not be offered better terms than "innocent" bondholders who took part in the swaps. The restructured bondholders include funds managed by Gramercy Financial Group LLC and BlackRock Inc, according to the court papers from the group.

The case has run for years in U.S. courts. Oral arguments before the 2nd Circuit on the appeal are set for Feb. 27, 2013.

A decision against Argentina would deal a setback to President Cristina Fernandez, who is trying to avert the fallout of a potential technical default on tens of billions of dollars of debt.

In a statement late on Friday, an NML spokesman said Argentina was well placed to compensate the holdouts, citing its "more than $43 billion in foreign currency reserves" and billions more in other resources.

"Today's filing by the Republic once again demonstrates Argentina's irrational persistence in evading its contractual obligations and the orders of U.S. courts," said Peter Truell, a spokesman for NML.

There was no immediate reaction comment from Argentina.

Also on Friday, the U.S. government filed a friend-of-the-court brief in support of Argentina's bid for the appeals court to reconsider its October ruling that found Argentina had improperly discriminated against bondholders who did not participate in the debt swaps.

The U.S. government said countries needed leverage to garner broad creditor support for a restructuring. It cited the recent debt exchange in Greece as an example of a situation in which holdouts can threaten orderly bond restructurings.

JUDICIAL REPRIEVE

Following the appeals court's October decision, U.S. District Judge Thomas Griesa in Manhattan on Nov. 21 commanded Argentina to put the payments for the holdouts into escrow by Dec. 15.

But on Nov. 28, the 2nd Circuit gave Argentina a reprieve, saying it did not need to make the escrow payment for now.

The battle has even extended to the 2-1/2 month seizure of the Argentine naval vessel ARA Libertad in Ghana at the request of NML. The boat was freed on Dec. 19 following a ruling by an international admiralty tribunal.

In its court papers, Argentina said that if Griesa's orders were allowed to stand, "we may very well see the end of such restructurings and enter an era where debt crises are unresolvable. This will increase litigation, not reduce it."

The case is NML Capital Ltd et al v. Argentina, 2nd U.S. Circuit Court of Appeals, No. 12-105. (Additional reporting by Martha Graybow and Alejandro Lifschitz)

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