The former Yugoslav republic had been hoping to be invited to join NATO's Partnership for Peace (PfP) programme, a key step toward full membership, at the alliance's summit in Turkey this week.

But NATO issued a statement on its website Monday saying "particulary obstructionist elements" in the Serb-run Republika Srpska, part of post-war Bosnia, had not met a "fundamental requirement" of acceptance into the PfP by failing to arrest war crimes suspects wanted by the UN tribunal at The Hague.

Ashdown described NATO's decision as a "major setback for anyone who wants to see this country become a stable and prosperous European democracy".

"I have one aim: to get Bosnia-Hercegovina into PfP as fast as possible ... so I am now drawing up measures to reduce the influence of those who want to obstruct this country's progress," said the British diplomat.

Ashdown's office has far-reaching powers under the Dayton peace accords that ended Bosnia's 1992-95 war, including the power to impose laws and sack elected officials.

He condemned the "actions and inactions of a group of obstructionists who believe that helping (top Bosnian Serb war crimes suspect) Radovan Karadzic and other indictees evade justice is more important than the security and prosperity of ordinary citizens".

Former Bosnian Serb leader Karadzic has been wanted by the International Criminal Tribunal for former Yugoslavia since 1995 for his alledged role in war cimes and genocide.

He has evaded several NATO-led attempts to arrest him. The authorities in Republika Srpska, where Karadzic is considered a hero, have failed to arrest a single war crimes suspect since the end of the war.

Post-war Bosnia consists of two highly autonomous entities -- the Muslim-Croat Federation and Republika Srpska.

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