The UN's chief war crimes prosecutor said today that General Ratko Mladic, the former Bosnian Serb army chief indicted for genocide and crimes against humanity, was still at large in Serbia.

Belgrade newspapers brushed aside official denials this morning and insisted that General Mladic, who oversaw both the siege of Sarajevo and the 1995 Srebrenica massacre, had either already been arrested or was negotiating the terms of his surrender to Serbian special forces.

But Carla del Ponte, chief prosecutor at the International Criminal Tribunal for the Former Yugoslavia in The Hague, told a press conference that she had spoken to senior Serbian officials and they had assured her that there had been no negotiations for his surrender.

"There is no indication at all that negotiations about his surrender are currently under way," Ms del Ponte said. "Mladic remains at large... the false rumours spread yesterday from Belgrade about the arrest of Mladic have absolutely no basis whatsoever."

Serbia faces a deadline of next Tuesday to hand over Europe's most wanted man or face the suspension of negotiations that could eventually lead to European Union membership.

The Government of Vojislav Kostunica, the Serbian Prime Minister, has handed over 15 suspects in the past couple of years but fears a nationalist backlash if it moves against General Mladic, whom many Serbs still consider a war hero.

The first reports that Serbian authorities had moved against "the Butcher of Bosnia" came with a report that he had been captured in eastern Bosnia and was being taken to a US air force base at Tuzla for transport to the UN war crimes tribunal in The Hague. Subsequent reports said that he had been captured in the Belgrade area.

Yugoslav government officials denied the reports, as did officials in Washington and The Hague. This morning, however, Serbian newspapers and broadcasters continued to insist that the net was closing in on General Mladic.

The Serbian dailies Glas Javnosti and Blic and the Bosnian Serb newspaper Nezavisne Novine said that the general was at a secure location negotiating the terms of his surrender. The talks were variously said to be taking place at a monastery, or a hunting lodge, or a village with an underground rocket base.

The Belgrade daily Kurir quoted a source close to the BIA security agency as saying the government denial was a cover-up to prevent popular anger at the arrest of a man many still consider to be a war hero.

"The government spokesman doesn’t dare confirm it because there’s a fear of unrest in Belgrade," the source said. "But it is completely true that Mladic has been arrested."

Ms del Ponte praised the European Union for making the link between war crimes and Serbia-Montenegro's future integration into Europe. But she said she had no doubts that General Mladic was in Serbia and could be arrested whenever the government decided.