Under the so-called "Energy for Democracy" initiative the towns of Nis and Pirot, which are close to the border with Bulgaria, are to receive the fuel in spite of the current oil embargo on Yugoslavia.

Serbia's power grid was badly damaged by Nato airstrikes earlier this year.

Jacky Rowland: EU has made a serious miscalculation

"It is essential because these people are going to freeze otherwise," one EU diplomat was quoted as saying.

But EU Commissioner for External Relations Chris Patten acknowledged the plan was risky while Yugoslav President Slobodan Milosevic remained in power.

The EU ministers also decided to leave in force a flight ban on Yugoslavia which excludes the territory of Kosovo and Yugoslavia's junior republic of Montenegro.

A rare appearance for Mr Milosevic in Leskovac

A number of opposition leaders who were invited to the Luxembourg meeting decided to boycott the talks.

They objected to a draft statement which made future aid to Belgrade dependent not only on a restoration of democracy there, but to the handing over of war crimes suspects.

Milosevic denounces

The BBC's Linda Duffin reports

The Luxembourg meeting coincided with a fierce denunciation by President Milosevic of his domestic opponents, which was also his first direct reaction to recent street protests in Serbian cities calling for his resignation.

He said the opposition wanted to turn Serbia into a pro-Western colony and his was the only government which could take the country forward.

"They are cowards and bootlickers, who are threatening to destroy what we have defended from Nato," Mr Milosevic said. "The only thing they want is to push the country into a civil war."

The president was making a rare appearance in front of a specially assembled crowd in the southeastern town of Leskovac to open a newly built railway station.

EU plan in trouble

The European plan has been opposed by the United States, which fears that it would help President Milosevic.

Among the Serb opposition leaders who stayed away was Zoran Djindjic, leader of the Democratic Party - the dominant force within the Alliance for Change.

BBC's Jacky Rowland: "The War Crimes Tribunal is highly unpopular in Serbia"

Altogether, more than two dozen opposition leaders - including Serbian Orthodox clerics and the Montenegrin prime minister - objected to a clause in the draft communique fearing it would oblige them to hand over indicted war criminals to the UN war crimes court.

The BBC Belgrade correspondent, Jacky Rowland, says the War Crimes Tribunal for the former Yugoslavia is seen by many as primarily set up to prosecute Serbs.

Opponents of Mr Milosevic are also reluctant to sign up to the EU deal because this might tarnish their image among Serbs.

Zoran Djindjic said on Sunday that the EU insistence on an extradition pledge raised questions about the wisdom of attending the Luxembourg meeting.

"Our main priority is the coming winter and the possible humanitarian catastrophe," Mr Djindjic told the Associated Press.