TBILISI - Georgia denounced Russia's decision to increase support for two breakaway regions inside its neighbours' territory, a move that also drew concern from NATO and the European Union.

"This is an attempt to legalise the annexation of two Georgian regions," Georgian Foreign Minister David Bakradze said in a statement.

"It contradicts all international laws. Georgia will use all diplomatic, political and legal tools to stop this process, which destabilises the situation in the region," he said.

Russia's move to boost ties with Abkhazia and South Ossetia also drew international condemnation. NATO called for the decision to be reversed and the European Union also expressed its concern.

Russia has redoubled support for the separatists in its pro-Western neighbour Georgia in response to Western recognition of Kosovo as an independent nation.

Moscow has vehemently opposed Kosovo's unilateral declaration of independence from Serbia.

On Wednesday Russia announced it would intensify cooperation with the two breakaway Georgian regions, notably by recognising businesses and organisations registered in the two territories.

Abkhaz and South Ossetian officials said the moves were a significant step towards recognising the independence of their regions.

Russia's foreign ministry said Moscow would support Abkhazia and South Ossetia in trade and economics, social services, culture and education.

The order was intended to pave the way for "mechanisms for the complete protection of the rights, freedoms and legal interests" of Russian citizens living in the regions, Russia's foreign ministry said.

NATO Secretary General Jaap de Hoop Scheffer called on Russia to repeal the decision, saying in a statement that he was "deeply concerned."

"I urge the Russian Federation to reverse these measures, and call on the Georgian authorities to continue to show restraint," he added.

A spokeswoman for EU foreign policy chief Javier Solana said he was "concerned about these unilateral decisions."

"We have always believed that this type of conflict must be resolved through dialogue," said Solana's spokeswoman, Christina Gallach.

Wednesday's declaration came a month after Russia dropped years of sanctions against Abkhazia, opening the way to a significant increase in trade links and sparking condemnation from Georgia.

Abkhazia and South Ossetia, which broke away from Georgian control during wars in the early 1990s, are economically dependent on Russia and most residents in both areas have been given Russian citizenship.

Georgia's President Mikheil Saakashvili has vowed to regain control over the regions and has long accused the Kremlin of stirring up separatism.

Georgia's fragmented status was one reason given by some members of the NATO military alliance at a meeting this month in Bucharest for delaying Georgian entry to the alliance, something Moscow strongly opposes.

Shota Malashkhiya, the chairman of the Georgian parliament's committee on territorial integrity, told Echo of Moscow radio that Russia's move "may lead to a boycott" when Russia stages the 2014 Winter Olympics in Sochi, just 25 kilometres (15 miles) from Russia's border with Abkhazia.

Officials in the two separatist administrations welcomed Russia's latest gesture, with Abkhaz foreign minister Sergei Shamba describing the measures as a "very important" step.

"Effectively, all that remains now are the final steps on the road to recognition of our independence," he told journalists in the Abkhaz capital Sukhumi.

South Ossetia's foreign minister Murat Dzhioyev described the move as the "beginning of the recognition" of the two regions, Russia's RIA Novosti news agency reported.

The Russian foreign ministry, however, said its actions were aimed only at "strengthening security and stability in the Caucasus region."

The statement added: "Our actions in relation to Abkhazia and South Ossetia do not mean that Russia is choosing confrontation with Georgia."

im-mm/jj

04/16/2008 18:45 GMT