* Makaziwe Mandela hints at racism in foreign media frenzy
* Says her father still responding to touch, moving eyes
* Mandela "improved" overnight, still critical - presidency
* Obama calls Mandela "hero", still to visit South Africa
By Siphiwe Sibeko
PRETORIA, June 27 (Reuters) - Nelson Mandela's eldest daughter lambasted foreign media "vultures" for violating her father's privacy as he lay critically ill in hospital, and said the former South African president was still clinging to life on Thursday.
Makaziwe Mandela's outburst came as anxiety increased over the faltering health of the 94-year-old anti-apartheid hero, admired across the world as a symbol of resistance against injustice and oppression and then of racial reconciliation.
President Jacob Zuma cancelled a scheduled trip to neighbouring Mozambique on Thursday because of the gravity of Mandela's condition, but a mid-afternoon official update said his health had improved.
"He is much better today than he was when I saw him last night. The medical team continues to do a sterling job," Zuma said in a statement. Mandela remained critical but was now "stable", it added.
Makaziwe was sanguine about her father's chances after nearly three weeks of treatment in a Pretoria hospital for a lung infection.
"I won't lie, it doesn't look good," she told state broadcaster SABC. "But as I say, if we speak to him, he responds and tries to open his eyes. He's still there".
Having run the gauntlet of camera crews and reporters at the hospital, Makaziwe criticised what she said was the "bad taste" of the foreign media and intrusion into the family's privacy.
"There's sort of a racist element with many of the foreign media, where they just cross boundaries," she said.
"It's truly like vultures waiting when the lion has devoured the buffalo, waiting there for the last of the carcass. That's the image we have as a family."
Her criticism followed several sharp rebukes from Zuma's office of some foreign media reports that have given alarming details of Mandela's condition.
Spokesman Mac Maharaj declined to comment on the latest report by a major U.S. TV news network that Madiba, as he is affectionately known, is on life support. He said this was part of Mandela's confidential relationship with his doctors.
Makaziwe compared the massive media attention on Mandela, who has been in and out of hospital in the last few months with the recurring lung infection, with the coverage of the death in April of former British prime minister Margaret Thatcher.
"We don't mind the interest but I just feel it has gone overboard. When Margaret Thatcher was sick in hospital, I didn't see this kind of media frenzy around Margaret Thatcher," she said. "It is only God who knows when the time to go is."
OBAMA: MANDELA A "PERSONAL HERO"
Mandela's fourth hospitalisation in six months has led to a growing realisation among South Africans that the man regarded as the father of their post-apartheid "Rainbow Nation" will not be among them for ever.
"Mandela is very old and at that age, life is not good. I just pray that God takes him this time. He must go. He must rest," said Ida Mashego, a 60-year-old office cleaner in Johannesburg's Sandton financial district.
In Pretoria and the sprawling Johannesburg township of Soweto, the ruling African National Congress bussed in hundreds of supporters to start a nocturnal vigil for Mandela, the 101-year-old liberation movement's most famous leader.
U.S. President Barack Obama, who is due to visit South Africa this weekend, said his thoughts and prayers were with the Mandela family and South Africa's 53 million people.
Speaking in Senegal, his first stop on a three-nation African tour, Obama said Mandela was a "personal hero". "Even if he passes on, his legacy will linger on," he said.
Pretoria dismissed concerns about disruptions to Obama's schedule, saying it was "getting ready" to welcome the United States' first black president to the historic Union Buildings, where Mandela became South Africa's first black president 19 years ago.
Mandela is revered for his lifetime of opposition to the system of race-based apartheid rule imposed by the white minority government that sentenced him to 27 years in jail, more than half of them on the notorious Robben Island.
He is also respected for the way he preached reconciliation after the 1994 transition to multi-racial democracy following three centuries of white domination.
Mandela stepped down in 1999 after one five-year term in office. Since then he has played little role in public life, dividing his time in retirement between his home in the wealthy Johannesburg suburb of Houghton and Qunu, the village in the impoverished Eastern Cape province where he was born.