A letter, obtained by AFP, was sent to the bank on July 10 with a series of questions involving procurement contracts and complaints.

The Financial Times reported last week that World Bank funding for the program had been cut after discrepancies were found in contracts providing soldiers to be demobilised with packages that included cash and motorcycles.

The plan was part of Cambodia's efforts to scale down its army to less than 100,000 soldiers and was widely seen as one of the trickiest but most pressing issues when almost 30 years of civil war officially ended in 1998.

Diplomatic sources here confirmed the news report, however, a World Bank spokesman was unavailable for comment.

"Funding by the World Bank for phase two of the demobilisation program has been completely cut," one Western diplomat told AFP.

The letter signed by Sun Chhay, from the opposition Sam Rainsy Party and a member of the National Assembly, said the public had a right to know what was happening with the demobilisation process.

"If the World Bank does not try to prevent this public review of the process from being undermined by corruption and bad faith, the Cambodian demobilisation program will be a farce."

It said the World Bank would then be responsible for the "ensuing sufferings of the Cambodian people."

The government agreed to demobilise 15,000 troops in 2001, then another 15,000 in a second phase due to be completed before the end of last year.

But a failure to promptly deliver the packages -- which include a cash equivalent of 240 dollars, motorbikes, sewing machines and other household goods -- resulted in the second phase of demobilisation stalling.

WAR.WIRE