By Shaban Buza
PRISTINA, Serbia and Montenegro, Aug 9 (Reuters) - Kosovo's ethnic Albanian leaders gave the province's minority Serbs until Wednesday to decide on a government reform plan seen as crucial to clinching negotiations on the province's future.
Kosovo's government is under pressure to do more on minority rights and democracy before a decision on whether "final status" talks can start this year. A key issue is decentralising power to Serbs, who live in enclaves guarded by NATO-led peacekeepers.
Local Administration Minister Lutfi Haziri said government offered local Serb leaders a new draft of the decentralisation plan, charting out bigger self-governing areas. Serbs spurned a previous draft, saying it mapped out small, isolated areas that would be economically unviable.
"I hope that this last sincere offer will be accepted, especially by the Serb community," Haziri said on Tuesday. "Tomorrow is the deadline. Otherwise, the government will proceed with the implementation of the pilot projects".
The decentralisation pilot would create five municipalities. If successful, it could be expanded with the aim of integrating the Serbs, who have so far blocked the process by shunning Pristina authorities and looking to Belgrade for direction.
The process is also opposed by ethnic Albanians loath to concede too much too early or play into the hands of those favouring the partition of Kosovo along ethnic lines.
"This new phase of decentralisation can only be called cantonisation and territorial partition, not based on multi-ethnicity but on the contrary based solely on ethnic principles," said opposition deputy Enver Hoxhaj.
The 90-percent ethnic Albanian majority demands formal independence from Serbia, six years after becoming a United Nations protectorate when NATO bombers drove out Serb forces.
The Kosovo government was criticised by its Western backers last month for dragging its feet on decentralisation, only a few crucial weeks before U.N. envoy Kai Eide submits a report by September on whether talks should begin, possibly in October.
If his review is positive, U.N. Secretary-General Kofi Annan will appoint a special envoy for what could be six to nine months of shuttle diplomacy between Belgrade and Pristina.
Analysts warn of a repeat of fatal Kosovo-wide riots against minorities in March last year should talks be delayed.
And Washington has signalled it wants a decision soon on the last pending issue from the collapse of Yugoslavia in the 1990s, warning that the status quo is not sustainable.
Belgrade says the southern province of 2 million people is the cradle of the Serb nation and can never become independent.
Serbia lost control over Kosovo in 1999 after Western powers accused its forces of brutal atrocities against civilians as they fought to crush a separatist insurgency. Some 180,000 Serbs fled a wave of Albanian revenge attacks but 100,00 remained.