Error: Could not find or load main class

Starting 1.8 through launcher app, game crashes with error message "An unexpected issue occurred and the game has chrashed. We're sorry for the inconvenience. Exit Code: 0"

Using logg output following text is produced

10:49:42.295
launcher
main
Preparing to launch minecraft client for 1.18
10:49:42.296
launcher
main
Prepared asset index
10:49:42.568
launcher
main
Have 3091 total files to check or download
10:49:42.572
launcher
main
Waiting for 3091 futures
10:49:42.898
launcher
main
Minecraft client 1.18 is ready to start.
10:49:42.898
launcher
main
Starting!
10:49:42.898
launcher
main
Nothing to download!
10:49:42.898
launcher
main
Downloading Java Runtime java-runtime-beta:17.0.1.12.1
10:49:43.034
launcher
main
Extracting 8 files!
10:49:43.245
launcher
main
Using default game log configuration client-1.12.xml (outputs XML)
10:49:43.399
launcher
main
Error: Could not find or load main class net.minecraft.client.main.Main Caused by: java.lang.ClassNotFoundException: net.minecraft.client.main.Main
10:49:43.399
monitor
Process Monitor
Process crashed with exit code 1
 
What I've tried:
Reinstalling launcher app, both for windows 10 and for 7/8 and Removing and redownloading .minecraft folder in appdata and restarting the computer. In all orders.
Updating Java.
Updating windows
Downloading 1.8.jar from https://mcversions.net/ and replacing the old one.

Examing launcher_settings.json found this line "productLibraryDir" : "C:\\Users\\Gr\u00e5skala\\AppData\\Local\\Mojang
products"
The user account i'm using is called Gråskala
Editing this line to "productLibraryDir" : "C:\\Users\\Gråskala\\AppData\\Local\\Mojang
products" - same issue.

Then I created a new account on my computer without any "foreign" letters. Installing windows 10 minecraft launcher got another error message "Could not update windows" from the minecraft launcher (what even?).

what worked: Uninstalling windows 10 minecraft launcher and installing windows 7/8 launcher on new account (with only english letters, no special symbols). Game starts, no issue.

Problem could be having a non-english letter in windows user account name? Previous verisions of Minecraft worked without this issue, new since 1.18. have tried both launchers before 1.18 update.