Agencies affiliated with the European Union and the governments of Britain, Canada, Denmark, Finland, Germany, Japan and The Netherlands said they would stop activities in violence-torn stretches of the Himalayan kingdom from Sunday.

The biggest programme to be suspended is a German and British initiative to bring employment and food security to 30,000 people freed from virtual slavery in 2000 when Nepal outlawed hereditary forced farm labour.

A joint statement by the agencies said they would halt work indefinitely because of "Maoist extortion and security problems."

It said rebels had in recent weeks threatened development workers when seeking bribes.

"We have made it particularly clear that agencies neither register with nor contribute to Maoist organisations," the statement said.

United Nations agencies had in March threatened to stop aid operations in Nepal unless the Maoists halted extortion.

The Maoists have been waging an eight-year armed campaign to turn the world's only Hindu kingdom into a secular, communist republic. The uprising has left some 9,500 people dead.

The rebels accuse aid agencies of serving the Kathmandu elite and not the impoverished majority in the country of 25 million people.