(NICOSIA) - Cyprus said on Tuesday it was withdrawing legal action taken against the European Union executive arm over the funding of projects in the Turkish Cypriot north of the divided island.

"The government has decided to withdraw its appeal action against the European Commission over eight tenders relating to services and projects for the economic development of the Turkish Cypriot community," Cypriot government spokesman Stephanos Stephanou told reporters.

The supplies and services tenders were worth 10 million euros taken from a 259 million euro package earmarked for Turkish Cypriots.

He said the legal action was withdrawn after the text of the invitations for tender made clear that the north was not a third country in any way separate from the Cyprus Republic.

The legal action was decided on by the administration of hardline former president Tassos Papadopoulos before the election of communist leader Demetris Christofias in February on a platform of reconciliation and reunification.

Brussels has earmarked the aid package for the Turkish Cypriot community to ease the breakaway state's isolation after a divided Cyprus joined the EU in 2004 when Greek Cypriots rejected a UN reunification plan.

The EU aims to bolster the north's economy by making it easier for Turkish Cypriots to export their goods and encourage enterprise.

The self-declared Turkish Republic of Northern Cyprus is recognised only by Ankara and the island's internationally recognised Greek Cypriot government had expressed fears that the funding procedure could be seen as an upgrading the status of the north.

Cyprus has been divided since 1974 when Turkish troops occupied its northern third in response to an Athens-engineered Greek Cypriot coup seeking to unite the island with Greece.

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