New York: The Bush administration, under pressure from potential donors, will allow a new agency to determine how to spend billions of Dollars in reconstruction assistance for Iraq.

In a Bangkok-datelined story, a media report said the new agency to be independent of the American occupation, will be run by the World Bank and the United Nations. Washington is to announce the change at a donor conference in Madrid later this week.

The change effectively establishes some of the international control over Iraq that the US opposed in the drafting of the UN Security Council resolution that was passed on October 16, the report said quoting administration and international aid officials.

That resolution referred to two previously established agencies devised to ensure that all aid would be monitored and audited.

The 'New York Times' report, however, quoted diplomats as saying that other countries were unwilling to make donations because they saw the United States as an occupying power controlling Iraq's reconstruction and self-rule.

The change, supported by L Paul Bremer III, the chief occupation administrator in Baghdad, is meant to assure them as his team labours to reconstruct Iraq.

PTI