ANALYSIS-EU fears U.N. proposal may fall short on Kosovo

BRUSSELS, Oct 30 (Reuters) - European officials are worried that a U.N. mediator will avoid outlining a clear final status for Kosovo, risking a unilateral declaration of independence that may cause a diplomatic crisis and split the European Union.

Officials familiar with Finnish mediator Martti Ahtisaari's thinking say he is set to stop short of proposing independence for the breakaway Serbian province in deference to fierce hostility from Belgrade and strong Russian opposition.

"The dangerous situation is if there is no clear recommendation as to the final status," one senior EU official said. "There is a very significant risk of that."

EU Enlargement Commissioner Olli Rehn, in charge of the European integration of the Western Balkans, has been urging Ahtisaari to ensure clarity in his proposals for an agreed settlement, due to be issued sometime in November.

Many European officials are urging the mediator to delay his push for a deal until after early Serbian elections possible in December, following a weekend referendum that approved a new constitution declaring Kosovo an integral part of Serbia.

But the United States and Britain are pressing for a final status agreement this year, arguing that delay risks provoking violence among Kosovo's overwhelmingly Albanian population.

Kosovo has been under United Nations protection in a state of legal limbo since 1999, when NATO waged an air campaign to drive out Serbian forces and stop ethnic cleansing.

Its prime minister, Agim Ceku, insists independence by the end of this year is the only acceptable outcome for Kosovo's 2 million people, some 90 percent of whom are ethnic Albanians.

"Nothing less than independence will be acceptable," the former general told Reuters in an interview this month.

"MESSY SCENARIO"

While Washington and London argue that Kosovo's situation is unique, Russia sees it as a precedent for changing international borders without the consent of the country concerned.

If Kosovo can have independence against Belgrade's wishes, then breakaway regions of Moldova or Georgia backed by Moscow should enjoy the same right, Russian officials contend.

The EU official said Ahtisaari, a former Finnish president and veteran negotiator often tipped for the Nobel peace prize, felt it was not his duty to make "a judgment of Solomon".

He planned to set out legal arrangements on governance, decentralisation and minority rights but leave the ultimate final status decision to the U.N. Security Council.

The Kosovo daily Express, quoting two diplomats it said had seen Ahtisaari's draft, said the plan would not include the word "independence" but recommend Kosovo be given "treaty-making powers" and the right to join international organisations.

A senior European diplomat in the Kosovo capital Pristina said the report "seems to tie in very much with what we know.

"He doesn't mention independence but Ahtisaari is describing the criteria which characterise an independent country," he said.

An EU official in Brussels said that could trigger a "messy scenario" in which the Security Council would be deadlocked and the Kosovo government, perhaps with the green light from Washington, would declare independence.

If that happened, there would be an intense diplomatic battle over recognition, with the United States likely to lead a drive for recognition against Russian resistance.

The EU risked a split between "Orthodox and Habsburg" member states closer to Serbia and others such as Britain that might recognise Kosovo individually, he said.

DELAY OR HASTEN?

An EU diplomat in Brussels said a discussion of Kosovo among ambassadors of the 25-nation bloc last week was based on the assumption that Ahtisaari would delay.

"Now it looks as if the whole schedule has been delayed. Ahtisaari will want to see Serbian elections before presenting his report. People recognise it is a very complicated process," the diplomat said.

But Macedonian Foreign Minister Antonio Milososki said after talks with EU officials last Friday that a delay in Kosovo's final status could affect his own country next door.

"The situation in our country is stable, however we are aware that certain risks exist on Kosovo," he said. "You need only three people, one landmine, one flag and a press communique to have an incident.

"Therefore we think a decision concerning the final status of Kosovo should be taken earlier ... The endless prolongation of the status quo is not creating a bigger space for some ideal solution. There will be no ideal solution," he said.

It was always best to take difficult decisions in the Balkans in winter, he said, before the snows melt and fighters can take to the mountains. (Additional reporting by Mark John in Brussels and Matt Robinson in Pristina)