Manila- Protracted clashes between government troops and Muslim rebels in the southern Philippines could lead to a pullout of foreign development projects in the strife-torn region, Britain's ambassador said Tuesday.

Peter Beckingham said he was worried the hostilities between the Moro Islamic Liberation Front (MILF) and the military would hamper aid projects in the southern region of Mindanao, where poverty is among the highest in the country.

"The longer this sort of trouble goes on, the more the positive developments are going to get pushed back," he warned.

Beckingham, however, stressed that Britain would continue its development projects in Mindanao despite the conflict.

"We are not suspending it," he said. "We have people there, and they are still there."

On the military front, government troops on Tuesday captured a satellite camp of the MILF in Datu Saudi Ampatuan town in Maguindanao province, 960 kilometres south of Manila, said Lieutenant Colonel Julieto Ando, a regional army spokesman.

"There was no resistance, and a mere look at the camp showed the rebels hurriedly left leaving behind their rifles and personal belongings," he said.

The military has been pursuing two MILF commanders who launched deadly attacks last month against several towns and villages in the provinces of Lanao del Norte and North Cotabato that killed about 60 civilians and displaced more than 360,000.

The hostilities erupted after the Supreme Court stopped the signing in early August of a territorial deal between government and MILF peace panels that would have expanded an existing Muslim autonomous region in Mindanao.

The Philippine government eventually scrapped the deal amid strong opposition by Catholic politicians, but the MILF has insisted that the government should honour the agreement, which was negotiated for more than four years. (dpa)