Morale among troops loyal to Serbian President Slobodan Milosevic continued to decline, but few direct strikes had been achieved.

Tony Blair, seen meeting refugees in Albania, says brigade of Serb forces has been destroyed

The admission comes days after Prime Minister Tony Blair, in an article for BBC News Online, said "the equivalent of a whole brigade" had been destroyed by Nato.

A British army brigade is composed of 4,500 troops, with 76 tanks and other armoured vehicles.

But at the daily Ministry of Defence on Wednesday Air Marshall Sir John Day suggested the casualty total among Serb troops could be lower than that figure.

"Milosevic's forces are gradually being weakened throughout Serbia and especially in Kosovo.

"Although they have yet to suffer significant casualties, we know from intelligence reports that they are finding it progressively harder to operate.

"We continue to receive reports that the morale of some elements of the army and special police is being damaged."

Pressed on the apparent discrepancy between his remarks and the prime minister's article, Sir John said: "Individual units are taking quite severe casualties. I was referring to overall throughout Serbia.

"Particularly, you will know, the majority of Nato's attacks have been in Kosovo, but progressively we are also targeting forces throughout Serbia."

Nato had a fuel depot on Tuesday night

Sir John said an ammunition plant and fuel depot had been struck during Tuesday night's offensive over in Serbia.

RAF Harriers had flown sorties, but failed to hit their intended targets.

Overall, Nato had inflicted considerable damage on President Milosevic's military operation, including destroying about a third of his key aircraft and striking more than half his airfields, Sir John said.

"In the past week, attacks have expanded to include military communication sites in north Serbia," he said.

Confusion on ground forces

The briefing came amid growing speculation about a split at the heart of Nato over the use of ground troops.

Nato's Secretary General Javier Solana with the German chancellor after talks

German Chancellor Gerhard Schröder on Wednesday repeated his opposition to starting an offensive ground war.

After talks at Nato headquarters in Brussels, he said Germany would never support sending in soldiers unless President Milosevic declared a ceasefire.

"We are against sending in ground troops. That is the German position, supported unanimously by members of the German Parliament.

"That is also the present position of Nato, that is to say, the strategy of the allies can only be changed if all members agree on it."

Italian Prime Minister Massimo D'Alema, who met Chancellor Schröder on Tuesday, has also suggested a pause in the bombing campaign to seek a diplomatic settlement.

But the UK Government is continuing to insist the air offensive will not stop until Nato's demands are met.

"Ethnic cleansing" could spread, if Milosevic is not stopped, the UK defence secretary warns

Prime Minister Tony Blair's official spokesman said: "At some stage there has got to be a stop but it has got to be when we decide.

"The only time we are going to stop is when we have the conditions met on our terms."

Defence Secretary George Robertson, on a one-day visit to Hungary, backed this view, but said sending in ground troops was "not on the agenda".

He added: "There is a critical point here about what would happen if Milosevic got away with what he is doing in Kosovo.