Sofia - Bulgaria will seek to rely on its own surplus budget after the European Union cut off almost 500 million euros in aid to the country over Sofia's shortcomings to halt corruption, local media reported Monday.

The Socialist-led coalition which also includes the liberal NMS and the ethnic-Turkish dominated MRF decided at a weekend meeting in the south-western ski resort of Bansko to compensate the cancelled EU funds from the budget which currently shows a balance 3.8 billion lev (1.9 billion euros), local media reported.

A new working group was tasked to control all Bulgarian authorities responsible for payments from Brussels, Prime Minister Sergei Stanishev said after the meeting.

The EU last Wednesday blocked the funds to force the government in Sofia to stop corruption and improve anti-graft efforts, the first- ever EU funds cutoff imposed on a member country.

The move had prompted opposition calls for the government to resign and protests by dairy farmers in Southern Bulgaria where national roads were blocked.

Brussels halted its payments after a European Commission report cited evidence suggesting that senior Bulgarian officials diverted EU aid. However, the report stopped short of continuing allegations made in an earlier draft version which suggested ties between Stanishev's government and organized crime.

The cut-off involves yet-to-be spent aid earmarked for Bulgaria's transition into the EU - 250 millions euros from the so-called PHARE programme that helps new members build institutions, 121 million euros for rural development and 115 million euros from a fund for major infrastructure projects, mainly highways. (dpa)