Interim Prime Minister Commodore Frank Bainimarama has been sent a clear signal by the European Union that millions of dollars in sugar subsidies are at risk if he does not heed the Pacific Islands Forum calls for elections by March 2009.

The EU representative at the post Forum talks in Niue Roger Moore told Dominion Post that the forum would take its lead on whether or restore assistance to Fiji from the grouping, which insists that the election timetable be met.

Moore said the EU suspended millions of dollars in aid for Fiji's ailing sugar industry after the events of December 2006, and this years allocation will be restored only if a credible path to elections is in place by October and next years allocation depends on a democratically elected government being in place.

He said the EU is likely to take its lead from the outcome of a special meeting to be held in Papua New Guinea by December.

Moore's comments put more pressure on Commodore Bainimarama after New Zealand Prime Minister Helen Clark said that the threat of losing subsidies to an industry that supports 150,000 people would be a factor in whether he agreed to an election in March next year as promised.