The European Union plans to cut back its funding for Burundi's lucrative peacekeeping contingent in Somalia to try to force President Pierre Nkurunziza into talks with opponents and away from the brink of ethnic conflict, diplomatic sources said.

Nkurunziza's government has brushed off other cuts in aid from Western donors seeking a way to pressure the government to stop a year-long political crisis exploding into a new war in Africa’s volatile Great Lakes region.

Bujumbura’s 5,400-strong contingent in Somalia's AMISOM force -- which earns the state roughly $13 million a year and its soldiers a combined $52 million -- may be the Achilles heel of a government that wants to keep its fractious army happy with the extra pay its troops earn from peacekeeping.

Top Burundi officers attempted, and failed, to stage a coup in May, but the rank-and-file army has broadly stayed above the political fray.

"Support for Burundi’s contingent of AMISOM cannot continue as it is," a European diplomat said.

For each African soldier sent to Somalia, the contributing government receives $1,000 a month for wages and logistics, paid for from a pot funded by the EU. In Burundi's case, the government keeps $200 a month and soldiers receive $800 each, a handsome bonus on top of their much lower regular pay.

Pulling the plug on funding altogether was one option, albeit the most extreme and unlikely given Burundi's determination to stay in the force, he said.

Cutting all funding would leave the African Union (AU), which oversees AMISOM's 22,000-strong force, having to find another donor to pay Burundi's troops. It is already under pressure as the EU had cut back its overall funding for AMISOM saying it wants other international donors to offer more help.

A second European diplomat said cutting all funding to Burundi's contingent was "far from being a reality right now", but he said cash would no longer be channeled via the government and the 20 percent kept by the state, worth about $13 million a year, would be scrapped.

"There is no way we will pay that anymore," he told Reuters, adding that the EU was conducting negotiations with the AU aimed at finding a mechanism that by-passed Bujumbura altogether.

THEY DON'T BUDGE

More than 400 people have been killed since last April when Nkurunziza said he was running for a third term in elections that he then won and which opponents said was unconstitutional.

Two percent of the population -- 220,000 people -- have since fled to neighboring countries like Rwanda.

Regional African nations and the West appear unable to defuse a crisis that increasingly resembles the slow build-up to Burundi’s 1993-2005 civil war, that left 300,000 people dead.

Frustration at the perceived intransigence of Nkurunziza's government has grown.

"They just don't budge," said another senior Western diplomat. Taking aim at the peacekeeping business had the best chance of "making an impact", he said.

Opposing camps have broadly been split along political lines in the crisis so far but diplomats fear old ethnic rivalries will become more pronounced if violence is left unchecked.

European nations and the United States have led efforts to put pressure on Bujumbura with aid cuts.

Brussels said on March 14 it was suspending direct financial support to the government, affecting a package worth about 432 million euros ($480 million) for 2014 to 2020, although emergency aid would continue.

To resume funding, the EU said Burundi had to free up the media, deal with rights abuses and launch genuine peace talks.

It also said it was "expecting to review and adjust the terms and conditions of financing and payment" of Burundi's AMISOM contingent, but it gave no details.

But while dollars are in short supply and businesses in urban areas are struggling -- the country's economy contracted shrank by an estimated 7.2 percent last year -- the effect of reduced aid flows has not been enough to sway the government given that much of the population are subsistence farmers.

Cutting off peacekeeping funds to the army would be a different matter. With the army's numbers estimated at about 27,000 troops, deployed on 12-month tours, few are untouched by the direct cash benefits.

"Considering the current economic situation, added to low salaries, AMISOM has been a salvation for military families," said an army major, who asked not to be named.

Based largely on his savings from two tours plus some of his regular salary of $312 a month, he built a new house. Threatening that lifeline could spark "rising indiscipline among soldiers," he said.

Burundi's army was reformed after the civil war to include both professional soldiers and fighters from former rebel groups, including those who were commanded by rebel-turned-president Nkurunziza.

An officer who has served in Somalia acknowledged that peacekeeping provided important cash for his family, but said he would remain loyal to the president no matter what.

"If missions are suspended many soldiers may be manipulated," he said. "But not all are corruptible.”

African states have been reluctant to turn the screws. The AU threatened to send a peacekeeping force to Burundi in December, but backed off in January when Bujumbura rejected the idea. Regionally sponsored peace talks have stalled.

Burundi has said it can live without EU aid, but has not commented on the threat to peacekeeper funding.

"EU aid cut doesn't mean the government will stop functioning," Foreign Minister Alain Nyamitwe told Reuters.

When asked about the review of EU financing for its troop contingent, he said: "I prefer to wait."

Agencies