NAIROBI, Feb 17

The UN's food agency on Wednesday rejected claims some of its staff had diverted aid to hardline Somali rebels and called on the United States to free up millions of dollars meant for the Horn of African nation.

The World Food Programme said its investigation into the possible diversion of aid had absolved staff and partner organisations distributing food in Somalia.

Washington is withholding millions of dollars in aid amid fears it benefits al Shabaab insurgents, a group that has declared loyalty to al Qaeda and wants to impose its own harsh version of sharia law throughout the country.

"WFP has concluded an internal investigation and we found no evidence that our staff divert food and there was no evidence that our transporters did the same," said Peter Smerdon, the World Food Programme's spokesman in Nairobi.

The investigation followed reports that food aid meant for Somali civilians was finding its way into the hands of al Shabaab, which controls much of southern and central Somalia.

Fighting in Somalia has killed at least 21,000 people and forced more than 1.5 million from their homes since the start of 2007, leading to what aid agencies describe as the world's worst humanitarian crisis.

According to new estimates from the U.N.'s Food Agricultural Organisation, 42 percent of the Somalia population need aid the country has the world's highest malnutrition levels.

WFP suspended its work in much of southern Somalia in January due to threats against its staff and because al Shabaab was demanding payments for security.

The UN humanitarian coordinator for Somalia accused Washington of politicising aid funds after negotiations aimed at releasing the millions of dollars for Somalia stalled.

"Where the negotiations have stalled are the practicalities of the measures the agencies have to undertake and that, in my view, is politicisation of serious humanitarian issues," Mark Bowden told reporters in Nairobi. He declined to elaborate on what those measures were.

"No UN agency has paid any money to al Shabaab," he said.

The UN agencies said the curbs on funding for areas under al Shabaab were forcing some to cut back on programmes and leading to even more suffering for desperate Somalis. The United States is the biggest aid donor to Somalia.

"We are going into this year in a very worrying financial situation," Bowden said.

Somalia has lacked an effective central government since 1991. An African Union AMISOM peacekeeping mission in Somalia is slowly being bolstered. It is made up of about 5,200 troops and will eventually increase to 8,000.

-Reuters