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BRUSSELS, Oct 13 (Reuters) - The European Union on Wednesday admitted it was using humanitarian aid as a political weapon in Yugoslavia, with plans to ship winter heating oil to some Serbs but not others being made on a political basis.
An EU spokesman denied, however, that the 15-member bloc was going even further in its efforts to influence Serbian politics by also pressing aspiring EU-member Hungary to block shipments of Russian natural gas to the republic.
Hungary said it was blocking the shipments to Serbia of its own accord.
The EU's controversial "Energy for Democracy" plan -- to ship $5 million of heating oil to two opposition-administered Serbian cities --is opposed for differing reasons not only by Belgrade but by opponents of Yugoslav President Slobodan Milosevic and the United States.
EU sources admit the plan is highly sensitive, exposing tough choices confronting the bloc on humanitarian aid for Serbia versus Washington's desire to undermine Milosevic.
"Yes, there is a political element," European Commission external relations spokesman Gunnar Wiegand said.
It was "a positive signal to the Serbian population that the West is not having these sanctions in place against the Serbian people but against an undemocratic and authoritarian regime," Wiegand said.
EU PLAN HAS MANY OPPONENTS
Serb dissidents reject the EU plan as overt politicisation of humanitarian aid. The Milosevic regime denounces it as rank interference in Serbia's internal affairs. The United States says it could backfire and play into the hands of Milosevic.
Western allies in the NATO air campaign against Yugoslavia agreed Serbia must get no reconstruction aid until Milosevic was replaced and a democratic government installed.
But discrimination in humanitarian aid makes some uneasy.
"Heat is a basic humanitarian necessity during the cold Balkan winters and should go to all Serbs who need it," The New York Times said in an editorial on Tuesday.
While the cities of Nis and Pirot are to get EU-sponsored fuel, the rest of Serbia will be left to cope with whatever heat the Belgrade government can supply from an industrial and logistical infrastructure wrecked by NATO bombing.
Serbia thought it had found a solution in a Russian contract to provide ample natural gas, but this is being thwarted by northern neighbour Hungary which is not bound by the EU sanctions regime but keen to align itself with EU policies.
"The EU has not exerted pressure on Hungary to take this decision. It is entirely the responsibility of the Hungarian authorities," Wiegand said.
An Economics Ministry spokeswoman in Budapest said: "Hungary is holding itself to whatever the EU has declared."
It was a political decision "and until there is a political change in Yugoslavia there can't be any easing of the embargo."
FEARS PLAN COULD BACKFIRE
The possibility that EU heating oil aid could spread or be hijacked or simply help Belgrade by taking up some of the nation's heating burden worries the United States.
State Department spokesman James Rubin said the U.S. and the EU were discussing how to ensure Milosevic supporters were not going to get the fuel.
Heating oil was a borderline issue since no great shortages were forecast this winter, he said. "We believe that in general we want to be supportive of humanitarian supplies for all of Serbia, not just for opposition-held areas," Rubin said.
United Nations Secretary General Kofi Annan warned in Rome on Monday there was an imminent humanitarian crisis in Serbia, where 700,000 refugees from Croatia and Bosnia are in "dire need" of winter heat, power and water supplies.
"I have argued for quite a long time that we should define humanitarian assistance in a broad enough manner to allow for assistance and repairs to electricity and heating systems and water for people through the winter," Annan said.