Serbia is taking a typically defiant stand in the face of the West's decision to exclude it from international reconstruction aid.

The ruling Socialist Party of Serbia said there could be no reconstruction of south-eastern Europe without Serbia's participation.

A party spokesman, Ivica Dacic, described the conference in Sarajevo as a gathering of those who helped in the aggression against Yugoslavia.

He alleged that the stability pact had a hidden agenda - to carve up Serbia into six republics.

No participation in international reconstruction untill Milosevic leaves power

Mr Dacic said Serbia did not want the West's money, just compensation for the damage it did to the country's infrastructure, industry and housing during the Nato bombing campaign.

Serbia has always managed to get out of economic difficulties, he maintained, and will continue to do so in the future.

Mr Dacic's defiant remarks are an attempt to cover up impending economic crisis in Serbia.

The war has left tens of thousands of people without work.

Devaluation rumours

Independent economists predict worse as the winter sets in and the state-run power company struggles to provide electricity to homes and businesses.

Rumours abound of a devaluation of the dinar, which is trading on the black market at half its official value, but the authorities have vigorously denied such plans.

Opposition parties have warned the West of the danger to the region of leaving Serbia isolated and feeling victimised.