Sarajevo - A high-ranking Bosnian Serb politician was murdered Sunday in what appears to be a soured business deal, local newspapers said on Monday. Branislav Garic, deputy chief of the Serbian Democratic Party (SDS) and deputy mayor of Doboj, a town 100 kilometres north of Sarajevo, was gunned down in his office Sunday afternoon.

Police confirmed they had detained Rajko Savic, a businessman and SDS supporter under suspicion of Garic's murder.

Bosnian Serb newspapers say Savic's construction company carried out much of the work on behalf of local authorities under SDS control.

The business recently however began to fail and Savic was forced to lay workers off, as his resources remained tied in several stalled projects ordered by the city hall and SDS. The murdered Garic had been deputy Mayor in Doboj since local polls last autumn.

SDS was the main Serb party during the bloody 1992-95 Bosnian war, but has lost the past two elections to the Serbian Social Democratic Party.

The party's top leaders from 1990s - Radovan Karadzic, Biljana Plavsic and Momcilo Krajisnik - were accused by the United Nations war crimes tribunal of the persecution of Bosnian Muslims.(dpa)