An aid conference to raise money for Macedonia is in doubt, according to European Union officials, after Macedonian MPs failed to approve part of a peace deal signed by ethnic Albanian and Macedonian leaders in August.

Many Macedonians accuse the government of surrender

Macedonia is hoping for up to $90 million in loans from European Union member states and the United States to help rebuild the country's economy following the conflict between security forces and ethnic Albanian gunmen is in doubt according to European Union officials.

Donors from various EU states had been planning to meet on 20 December, but on the condition that Macedonian MPs pass legislation aimed at reforming local government.

The proposed laws are part of the peace accord aimed at giving ethnic Albanians a greater say in the running of their affairs.

Delays

The deadline to pass the legislation was on Thursday night, but members of the ethnic Albanian Party for Democratic Prosperity (PDP) walked out of the session when the government tabled new amendments.

A spokesman for the European Union in Skopje said the conference was now in doubt, unless the legislation was passed in the next few days.

Parliamentary delays have plagued Macedonia's peace accords throughout the last four months and have prompted frequent visits from senior European Union and Nato officials.

Aside from this latest upset, western diplomats have expressed increasing optimism about the overall peace process.

Earlier this week, the government began releasing prisoners accused of being members of the ethnic Albanian guerrilla group - the National Liberation Army - putting in to effect a long-promised amnesty for the gunmen.