By Jonny Hogg
KINSHASA (Reuters) - The European Union has frozen further budgetary support to Rwanda over allegations that the Central African state supports anti-government rebels in neighboring Democratic Republic of Congo, the EU's ambassador to Congo said on Wednesday.
The EU is the latest western partner to impose aid suspensions against Kigali over an independent United Nations report that said Rwanda was behind a six-month rebellion in Congo's eastern hills, which has forced 470,000 people to flee their homes.
"It was agreed to freeze the program of budgetary assistance and to not agree to any supplementary budgetary credit for Rwanda without them giving signs of co-operating," Jean-Michel Dumond, the EU's ambassador in Kinshasa, told the U.N.-backed broadcaster Radio Okapi.
A spokesman for the EU in Brussels had said on Monday that existing projects would continue, but that a decision on additional budget support would be delayed until Rwanda's role in the unrest is clarified.
Although the scale of cuts was not given, the EU website says that the EU agreed a six-year budget support deal with Kigali in 2009, worth up to 175 million euros ($225 million).
Rwanda has repeatedly denied any involvement with the M23 rebel group in Congo.
Rwanda's foreign minister Louise Mushikiwabo responded to news of the cuts on the social networking site Twitter. "EU suspending 'new aid' to Rwanda is either old news or designed to mislead. No such decision has been taken," she wrote.
Last month President Paul Kagame hit out at donors who cut aid and he launched a so-called "dignity fund" to help to wean the country off its dependence on outside help.
Presidents Kagame and Congo's Joseph Kabila are due to join a U.N. crisis meeting in New York on Thursday, aimed at trying to find a solution to the problem.
On Monday U.S. Secretary of State Hillary Clinton met both leaders to push for a solution, only for Kabila to make indirect reference to Rwanda's alleged support for M23 in his speech before the U.N. General Assembly on Tuesday.
Other countries, including the United States, Sweden and the Netherlands have all suspended aid to Rwanda, which relies on donors for about 40 percent of its budget. However, Britain unblocked part of its cash this month, praising the Rwandans for constructively engaging in the search for peace.
Aid agencies say that the situation on the ground remains serious and the U.N.'s refugee agency has called for an additional $40 million to help those displaced by fighting.
Rwanda and Congo have a long history of tensions and Kigali has repeatedly backed armed movements in its neighbor, citing the need to tackle Rwandan rebels who use Congo as a base.
Critics say that Kagame's government has used its influence to build lucrative political and economic networks in its resource-rich neighbor, with officials and human rights groups saying that minerals continue to be smuggled out of the region through Rwanda. ($1 = 0.7788 euros)
(Additional reporting by Jenny Clover; Editing by Bate Felix and David Goodman)