Fixed by using information from here: http://www.howtoforge.com/forums/sho...52&postcount=9
In case someone else has the same problem - you need to edit
Change path "/usr/lib/cgi-bin/php" to "/usr/bin/php-cgi \"
It helped me and hope can help you as well.
Please feel free to provide corrections in case there is something wrong in what I have written here.