Italy said today that Libya may renege on a deal to control the flow of illegal immigrants because of a visa spat with Switzerland that has escalated into a Europe-wide row.

The deal has also seen a dramatic fall in the number of migrants reaching Malta.

Tripoli has stopped issuing visas to citizens of the Schengen passport-free zone that includes most of the European Union as well as Switzerland, in retaliation for a decision by Berne to bar entry to some Libyans including the country's leader Muammar Gaddafi and his family.

Libyan leader Muammar Gaddafi today also called for a jihad (holy war) against Switzerland.

Italy, which has close business links with Libya, has accused Switzerland of misusing the Schengen agreement and taking its members "hostage" by slapping the ban, which had forced other states to bar travel by Libyans as well.

Malta has also criticised the Swiss decision.

Speaking on the sidelines of a meeting of European Union interior ministers, Italy's Roberto Maroni said the row put the Schengen zone at risk and could further strain relations with Libya.

Cooperation by Tripoli in controlling immigration to the EU was one issue, he said.

"The fear is in part that ... Libya could weaken its border controls concerning illegal immigration," he told reporters.

The EU has offered Libya 20 million euros ($26.95 million) to help it cope with the flow of illegal migrants who often use the country as a departure point for southern Europe, particularly Italy.

Rome has also signed a cooperation agreement with its former North African colony last year to curb migration across the Mediterranean by setting up joint patrols.

Swiss Justice Minister Eveline Widmer-Schlumpf attended a meeting with EU ministers to discuss possible solutions to the travel row.

She reiterated Swiss denials that Berne had misused Schengen deals but declined to offer any details on the talks.

MALTA'S APPEAL

Malta Home Affairs Minister Carm Mifsud Bonnici, who was also present for the meeting, said the issue needed to be resolved as quickly as possible.

"Delays in settling this issue are further complicating matters and adding to the negative impact on neighbouring countries and the EU. This is also worrying in view of the rapid progress made last year in the level of collaboration between the EU and Libya."

Dr Mifsud Bonnici expressed concern over wrong application of Schengen rules and said this was sending the wrong message to those countries who were being careful to apply the agreement in word and spirit. The Swiss decision could also constitute a dangerous precedent which would further complicate matters.

Dr Mifsud Bonnici said Malta remained ready to give a helping hand for a solution to the issue.

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