Olusegun Obasanjo, the president, unveiled a multi-million dollar scheme to create jobs and build infrastructure in the delta on Tuesday.

He hoped the move would quieten separatist voices and bring peace to Africa's biggest oil export industry.

But the Movement for the Emancipation of the Niger Delta (MEND) - whose guerrilla attacks this year have cut Nigerian oil exports by about one quarter - dismissed the plan and threatened a return to violence.

"We wish to restate our warnings to oil companies still  operating in the Niger Delta, and more especially workers for such companies, to leave while they can," said a statement from MEND's email address.

"What we have demanded ... is the control of our resources, which the Nigerian government has so far ignored," MEND said.
   
"Our halt in attacks was more of a tactical suspension which has come to its end.

"At a time of our choosing we will resume attacks with greater devastation and no compassion on those who choose to disregard our warnings."

This year, separatist rebels fighting under MEND's banner have killed at least 24 members of the Nigerian security forces, kidnapped and released 13 foreign oil workers and blown up several major oil pipelines.

Development projects

On Tuesday, Obasanjo met politicians, business leaders and  traditional rulers from the delta and vowed to create almost 20,000 government jobs, drill hundreds of water wells and build a $1.75 billion highway.

Despite being the heartland of a massive oil industry exporting almost 2.6 million barrels a day, the delta is poverty stricken. In recent years resentment against the government and oil multinationals has mounted.

MEND says it will continue
attacks including on oil pipelines

The militants say the promised projects would serve only to enrich Nigeria's corrupt elite. They repeated their demand for local control of all oil revenues.

"We do not need any further mismanagement of the fast  diminishing resources of our land by the award of bogus contracts intended to channel the wealth of the Niger Delta back to the hands of those who have looted ... all these years."

MEND's warning will increase pressure on international oil  prices which have hit record highs, in excess of $70 a barrel, in recent days amid fears of US action against Iran and  further disruption to Nigerian exports.

Royal Dutch Shell and other major oil companies have shut 550,000 barrels a day of oil output pending a truce with MEND.

The government is keen for Western oil companies to resume production from oilfields abandoned after a series of attacks and kidnappings on February 18, but the companies have insisted they would return only when the security situation improves.