HELSINKI. Dec 11: The European Union threatened yesterday to revise trade and funding ties with Russia unless Moscow stopped bombing Chechen towns and revoked its ultimatum to civilians to leave Grozny or face annihilation, reports AFP.

In a statement Issued on the eve of the expiry of the chilling Moscow deadline. EU leaders condemned Russia's offensive in Chechnya and threatened to suspend certain trade ties with Moscow if it persisted with its 10-week military campaign in Chechnya.

"We have bent over backwards to try and be understanding and reasonable." said EU External Affairs Commissioner

Chris Patten, after the 15 heads of EU governments agreed their response at a summit here.

"Public opinion would not expect us to go on as if it was business as usual."

Italian Foreign Minister Lamberto Dini said the EU leaders were set to send a mission to Moscow in the coming days to press for an end to bombardments in Chechnya.

In their statement, the EU leaders demanded an end to what they called "the bombing and the disproportionate and Indiscriminate use of force against the Chechen population."

EU leaders called on Russia "not to carry out the ultimatum

against the civilian populations of Grozny," after Moscow declared earlier this week that it would mount an offensive against the capital of the rebel republic after Saturday.

By way of sanctions, they threatened to suspend "some of the provisions" of the EU-Rus-sia Partnership and Cooperation Agreement, with "trade provisions applied strictly."

The agreement, signed in July 1995. notably includes EU favourable trade concessions.

The leaders, who began a two-day summit here Friday, also ordered a review of the EU's common strategy on Russia, and said they would shift funds from the TACIS technical assis-

tance programme Into humanitarian aid?

'This would amount to a work-to-rule principle where Russia would be held to every letter of the agreement," an EU official said.

"We would not be withdrawing money from Russia but the end result would be that it would be channeled more to humanitarian aid than to technical aid." the spokesman added.

Western powers have mounted an escalating chorus of outrage at Russia's brutal offensive in Chechnya, but Moscow has insisted that its actions in the rebel republic are an internal affair.