The warning came in a strongly-worded statement from the European Union which said that "lack of respect for elementary principles of democratic governance" was seriously hampering development prospects in Bangladesh.

If the country's troubles continued, foreign trade and investment as well as development cooperation would suffer, said the statement, issued by current EU president Germany.

Six people died in Bangladesh last week in a violent three-day strike led by opposition parties trying to stop municipal elections and pressing for the resignation of the chief election commissioner.

The EU says it has a strong interest in Bangladesh's development, pointing out the two sides had concluded negotiations on a new aid agreement in February. But the statement said the present situation in Bangladesh was "making effective co-operation increasingly difficult".

The statement went on to urge all parties to show restraint and not to use violence as a political weapon.