Prime Minister Tony Blair has told the Balkans summit that £3m will be made available to support independent media broadcasting inside or into Serbia.

Cash is also expected to go to fund democratic opposition parties in Serbia.

The UK may also encourage the setting up of twinning arrangements between towns and universities in Britain and Serbia.

However, aiding the Serbian opposition is unlikely to be an easy task as any recipients of British funding could become targets for some form of reprisal by Mr Milosevic.

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The move comes only days after Mr Blair's government announced plans to make it illegal for UK political parties to accept money from foreign donors.

The prime minister and Foreign Secretary Robin Cook have joined dozens of world leaders who are meeting in Sarajevo to discuss ways to revitalise and stabilise the region following the Kosovo conflict.

Mr Blair has again insisted that Serbia will not receive any reconstruction aid while Mr Milosevic remains in charge.

During the summit, Mr Blair outlined details of the aid already committed to Kosovo and the frontline states around Yugoslavia, totalling some £250m.

He told delegates that the future lay in developing peace and prosperity through trade, mutual support and the countries themselves pursuing sound economic and social policies.

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He added that these opportunities are open to Serbia as well but "not while its leader is a man who is indicted for crimes against humanity."

Reinforcing what has become a consistent theme in Mr Blair's policy, he stressed that the responsibility for Serbia's isolation "lies squarely with Milosevic".

The prime minister called on the Yugoslav president to "stand aside" to allow the Serb people to rejoin the international family of nations.

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Speaking in a city that was devastated by the Bosnian war, he said he hoped that the Kosovo conflict would be the last such bloody episode in the break-up of the former Yugoslavia.

And he expressed the hope that the success of Nato's action might seeing the beginning of a new era for the region.

Mr Blair has also set out some practical proposals for the regeneration of the Balkans including open frontiers, to facilitate free trade, abolition of export duties, economic and social reform to encourage inward investment, and an investment charter.