Caroline Wyatt in Baghdad: "Tensions have been rising throughout the week"

They say the Iraqi Government has told them it has stopped issuing or extending visas to Britons and Americans supervising the oil-for-food aid package.

The BBC's correspondent in Baghdad, Caroline Wyatt, says that as the UN does not allow governments to dictate the composition of its teams, this move could set the stage for a new confrontation between Iraq and the Western allies.

The change in policy has been passed verbally to UN officials in Baghdad. They have not received confirmation in writing and it is not clear whether any UN staff have already been ordered to leave Iraq.

BBC's Paul Welsh reports

More than 100 relief workers were evacuated to Amman during last month's air strikes launched by the US and UK. All of them returned within days of the end of Operation Desert Fox.

Around 12 of them are believed to be British and American nationals.

Sources say Iraq has warned it cannot guarantee the safety of Britons and Americans in the aftermath of the bombardment.

Our correspondent says the government of President Saddam Hussein appears determined to keep this crisis at the top of the diplomatic agenda and exploit divisions within the international community.

Essential supplies

The relief staff supervise the oil-for-food programme that allows Iraq to sell limited quantities of oil to buy food, medicine and other essential supplies.

Most trade with Iraq is not allowed under the terms of a UN embargo imposed after the Gulf War.

Ordinary Iraqi families rely heavily on the food and medicine distributed by the UN workers.

The embargo is to stay in place until UN weapons inspectors, who operate separately from the humanitarian workers, confirm that Iraq has no remaining weapons of mass destruction.

Iraq has also repeatedly complained that the weapons teams are dominated by US and British citizens and has accused them of spying.