Tuesday, June 13 2006 13:08 Hrs (IST) - World Time -

United Nations: Concerned over the possibility of the reform package being scuttled by sharp differences between the rich and the poor countries, UN chief Kofi Annan has appealed to member states to tone down their rhetoric and instead hammer out 'sensible compromise' to prevent budget crisis.

In an effort to avoid immediate crisis, the UN General Assembly had late last year adopted the budget only till June 30 and Annan's appeal came as the deadline is approaching without any tangible progress towards management reforms.

Criticising US for linking release of its contribution to the world body to the reforms, Annan said "The power of the purse to force through badly needed management reforms have provoked a reaction among developing countries".

"The main contributors, led by the US, insisted that this spending cap should be lifted only when there is significant progress on UN reform," he said.

"We are now perilously near the deadline and it is far from clear that enough reform to satisfy them has been achieved. Neither side has found a way of engaging with the other to agree on further reforms, "Annan wrote in an article published in the Financial Times.

The situation, he noted, stemmed from a decision made by member states last December when they adopted a budget for the current 2006-2007 biennium, but "Gave the UN authority to spend only enough to carry us through the first six months."

Diplomats said that American Ambassador John Bolton along with some European ambassadors is expected to meet with Group of 77 developing nations in an effort to find a compromise that would allow the budget for the remaining year to be adopted.