Individual EU states were due to add their own contributions, with Germany signalling about $160m.

 

Other donors include Norway, Switzerland and Saudi Arabia. Britain was expected to offer almost $47 million.

 

Thaci said he was confident the donations would transform what was for decades the poorest part of the former Yugoslavia.

 

"We will make it an economic success story now... This donors' conference will be positive for all citizens of the country," he said, promising fair access to funding for the Serb minority in the overwhelmingly ethnic Albanian territory.

 

Sources close to the conference organisers said at least half the EU's 27 states were due to announce their own donations on top of the almost $800m from the EU budget.

 

Spain, one of the few EU states that have not yet recognised Kosovo, said it would not offer a separate donation but a foreign ministry spokesman in Madrid stressed it was ready to provide humanitarian aid to the population if needed.

War destruction

 

Five months after seceding from Serbia in defiance of Belgrade and its ally Russia, Kosovo remains weighed down by the destruction of the 1998-99 war, and a legacy of waste and corruption under international stewardship.

 

It has been recognised by 43 mostly Western states, but could face bids by Belgrade and Moscow to keep it out of the international bodies needed to attract loans and investment.

 

However, officials in Kosovo are convinced they can amass enough support to win membership of the World Bank and IMF.

 

Thaci said he hoped for a positive answer soon to its application bids, filed on Thursday.

 

A large part of the new aid will go to servicing Kosovo's share of the Yugoslav debt inherited from Serbia.

 

Analysts say that regardless of the amount raised, the government will have a tough job fulfiling the expectations of its two million people, the youngest population in Europe but one struggling with over 40 per cent unemployment.