Moody's decision to downgrade Greek debt was ill-advised and ill-timed, European Economic and Monetary Affairs Commissioner Olli Rehn said on Tuesday, adding that it cast fresh doubt on ratings agencies.

Rehn said the downgrade had not taken into account latest developments in Greece, with Athens recently agreeing to budget austerity in return for a massive bailout from the European Union and the International Monetary Fund.

Moody's decision came at quite an astonishing and unfortunate moment, Rehn said during a debate in the European parliament.

Moody's on Monday cut Greek government bond ratings four notches to Ba1 from A3, the second ratings agency to shift the Hellenic Republic's credit to non-investment grade and catching up with previous downgrades by other agencies.

Moody's decision does not in anyway take into account Greek commitments or the negative consequences, which were considerably reduced following the adoption of the (bailout) program, Rehn said.

He added that he had discussed the matter with EU Commission President Jose Manuel Barroso and Internal Markets Commissioner Michel Barnier, saying that the move revived the debate over the issue of ratings agencies.

The Commission is going to look into the question of competition in this sector, where there is a very strong concentration (of players). We are also going to look into transparency in the methodology and the question of conflict of interest, he added.

(Reporting by Gilbert Reilhac; writing by Crispian Balmer; editing by Patrick Graham)