ONE of Europe’s most wanted war crimes suspects, General Ratko Mladic, has struck a deal for $5m (£2.75m) “compensation” if he gives himself up before the 10th anniversary of the Srebrenica massacre in Bosnia — which was carried out by his forces.

Officials close to the negotiations said Mladic, who has spent a decade on the run, demanded the money for his family and bodyguards in return for an agreement to surrender to the International Criminal Tribunal for the Former Yugoslavia in the Hague.

The deal was brokered by a shadowy circle of Serb oligarchs, many of whom made their fortunes under Slobodan Milosevic, the former president already on trial in the Hague.

The oligarchs are anxious to put Serbia and Montenegro on track for membership of the European Union. Preliminary talks have effectively been blocked because of the Serbian authorities’ failure to hand over either Mladic or Radovan Karadzic, the former Bosnian Serb president. Both men stand accused of genocide and crimes against humanity.

Prosecutors from the tribunal are prepared to turn a blind eye to the means used to persuade Mladic, 62, to fly to Holland, provided he arrives before next month’s anniversary.

Even with a deal almost in place, however, officials are worried that the general may kill himself rather than submit to arrest. He is said to have suffered from bouts of depression since his daughter Ana, a medical student in Belgrade, committed suicide in 1994.

During the Srebrenica massacre, which began on July 11, 1995, more than 7,000 Muslim men and boys were killed by troops and paramilitaries under Mladic’s command as they tried to flee a United Nations “safe area”. Another 10,000 died during the shelling of Sarajevo by Bosnian Serb forces from 1992-95.

Sources in Serbia said the portly general realised in December that his days of freedom were numbered, when he was warned by his security advisers that international pressure for his arrest was becoming irresistible. The Serbian government has been denied aid worth tens of millions of pounds because Mladic and Karadzic remain at large.

Members of the FSB, the Russian security service — including one officer who was close to Mladic during the Bosnian war — have also been involved in the delicate negotiations, the sources said.

During his years on the run Mladic has been spotted occasionally near his former military bases in eastern Bosnia. On several occasions he has been seen at restaurants and sports events in Belgrade.

Reports in recent weeks have put him in Bosnia, a variety of provincial Serbian cities, Macedonia and even Russia. But a reliable source has said that he was in his house in a quiet cul-de-sac in Kosutnjak, a suburb of Belgrade.

The oligarchs, several of whom have property and business interests in London, were behind the recent handovers of other war crimes suspects to the Hague including General Nebojsa Pavkovic, who commanded Yugoslav troops in Kosovo.

Money is also believed to have been paid in such cases, though substantially less than the $5m promised to Mladic. The general, an avowed communist who was notorious for his anti-western rants, is said to have seen that figure as symbolic because the same amount has been offered by Washington for information leading to his arrest.

Vladan Batic, a former justice minister, criticised the negotiations over money and called for an investigation into the oligarchs’ growing influence.

“There are people ready to finance the extradition of war criminals in order to legalise their dirty money,” he said. “That way, everyone is happy: indictees, businessmen — and the government.”

However, Carla Del Ponte, the tribunal’s chief prosecutor, told the UN last week that “great changes have been noticed in the stance of the Serbian government”. She said she had become “certain” that the Serbs were ready to extradite Mladic.

Foreign diplomats have also signalled their approval, easing pressure on the government of Vojislav Kostunica, the Serb prime minister. America has already released £5.5m in aid money to Serbia that had previously been frozen because of the impasse over Mladic.

Serbian public opinion about Mladic remains deeply divided and many Serbs still see him as a hero. The climate has been changed in part by the recent broadcast on several television channels of a video showing members of the Scorpions, a Serb paramilitary unit, shooting Muslim prisoners in the back.

The country’s parliament failed last week to pass a bill condemning the Srebrenica massacre as a crime of genocide because of objections from right-wing radicals. Their leader, Nikoslav Tomic, urged Mladic to commit suicide rather than give himself up.

If Mladic does come to trial his testimony should help to answer many of the mysteries that still surround Srebrenica, chiefly why UN forces failed to intervene.

Serbian security sources who were watching the Mladic deal take shape last week claimed that in the lead-up to the massacre, the general’s behaviour had become increasingly erratic — putting him beyond the control of either Karadzic or Milosevic in Belgrade.

But Mladic’s evidence could influence Milosevic’s trial. One source said: “He’ll sing like a canary, just you see.”

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