Bosnian Serbs have agreed to abandon a contentious referendum that had threatened to deepen the worst political crisis in the country since the 1992-95 war, a spokesman for European Union foreign policy chief Catherine Ashton said on Friday, dpa reported.
"We wanted to sort this out in a European way and the high representative (Ashton) was able to travel there last night and tie up the deal,"
Michael Mann said in Brussels. "They are not going to go forward with the referendum."
An EU-led "structured dialogue on justice" - one of the tools the bloc can use to tackle judicial issues in countries aspiring to become members - will now instead be held in Bosnia.
EU Enlargement Commissioner
Stefan Fulle is planning to chair the first meeting of the body in Banja Luka, Ashton said. That could potentially take place in early June, according to Mann.
The dialogue will provide a "comprehensive overview of the whole judiciary," Ashton said in Bosnia. The commission will then issue recommendations based on its findings.
"We are convinced that this dialogue will bring solutions to concrete problems and re-establish this country on the EU path," Ashton added.
The president of the Serb part of Bosnia, Milorad Dodik, said that his compatriots want to "give a chance to the dialogue," with the aim of removing shortcomings in the Bosnian justice system.
That removes the need for the referendum at this point, he said.
"On the grounds of this offer from the EU, I will ask the (Serb) parliament to reach a decision that will reflect the new situation," he said.
Ashton insisted that he follow through with that promise.
"The engagement of the EU cannot be conditional. I expect you will stick to your commitments to remove the threat of the referendum," she said.
The Serb faction wanted to hold the referendum to challenge the authority of the Court of Bosnia and Herzegovina, particularly its war crimes department, which it insists is biased against Serbs.
It had previously threatened to walk out of Bosnian institutions if the international community imposed sanctions on its leaders for the referendum plan.
The EU and the international community's representative in Bosnia, Valentin Inzko, had rejected the proposal as unacceptable, saying that it would undermine Bosnian institutions.
A peace deal brokered by the United States in 1995 divided Bosnia into one region dominated by the Serbs and another shared by Muslims and Croats - each with broad, near-sovereign authorities.
The EU wants the so-called entities to cede a part of their powers to shared, central institutions as a condition for unfreezing Bosnia's progress to EU membership.