A former leader of the Croatian Serbs found guilty of murdering and forcibly displacing thousands of people during the Bosnian war has been found dead in his cell at the UN war crimes tribunal in The Hague.

Milan Babic, a one-time ally of Slobodan Milosevic, the former Yugoslav President, was found by medical staff in his cell in the UN's prison on the outskirts of The Hague at 6.30pm last night, according to a statement from the tribunal.

"The Dutch authorities were called immediately. After conducting an investigation, they confirmed that the cause of death was suicide," the statement said.

B92, a radio station in Belgrade, reported that Babic had hanged himself, quoting unnamed sources at the tribunal.

The tribunal said that Babic’s family was informed and that an internal inquiry had been ordered. His suicide was the second in UN detention in The Hague. Slavko Dokmanovic, another Croatian Serb leader, killed himself in 1998.

Babic, a former dentist, was in the midst of giving evidence against Milan Martic, his successor as President of the breakaway Serbian Republic of Krajina (RSK), which declared its independence from the rest of Croatia in 1991.

With support from Belgrade, RSK forces took over a third of Croatia from 1991 to 1992, wiping out villages, murdering non-Serbs and forcing thousands of people to leave their homes.

In testimony given last month, Babic said that his former underling had commanded a notorious police force and was responsible for taking Croatia's Serbs to war against the rest of the country. Babic said that Martic had tricked him into believing that the enclave was under attack from Croatian special forces.

A spokeswoman confirmed that Babic had been due on the stand to continue his testimony today. The trial of Martic, who is accused of shelling civilians in Zagreb, the capital of Croatia, with cluster bombs, has been adjourned until Wednesday afternoon.

Babic, who was 50, surrendered to the war crimes tribunal in The Hague in November 2003 and admitted committing crimes against humanity as the leader of the RSK in January 2004.

He pleaded guilty to one count of participating in "a joint criminal enterprise" to sweep non-Serbs from Serbian-held regions of Croatia, an operation that entailed the murder and deportation of thousands, including old women and children. He was ordered to serve 13 years in prison in a secret location but appealed against the sentence last year.

Before his conviction, Babic had already given evidence in the long-drawn trial of Milosevic, which entered its fifth year last month. For three weeks in late 2002, Babic sat behind a screen giving evidence against his former ally before dramatically emerging to face him during his cross examination. His testimony included telephone calls between Knin and Belgrade, suggesting that Milosevic planned campaigns in Croatia.

Babic was moved from his undisclosed location to the UN's detention unit in Scheveningen, a suburb of The Hague, last month to give evidence against Martic. He was also expected to be a witness in any trial of Ratko Mladic, the former commander of the Bosnian Serbs who is believed to be close to capture in Serbia.

On Saturday, Vojislav Kostunica, the Prime Minister of Serbia, said that he expected Mladic, who ordered the Srebrenica Massacre of 1995 in which 8,000 Muslim men and boys were killed, to be in custody by the end of the month.