UN envoy Martti Ahtisaari unveiled a plan for Kosovo Friday that would protect the Serb minority's rights in the province where ethnic Albanians seek independence.

"He shared his proposal with the Contact Group (Britain, France, Germany, Italy, Russia and the United States) and there was a very brief discussion about the way forward," Ahtisaari's spokeswoman Hua Jiang said.

Under the plan, Kosovo would be autonomous from Serbia but have an "International Civilian Representative" overseeing the government, and NATO troops would remain at first in the province, Ahtisaari told the Parliamentary Assembly of the Council of Europe on Wednesday in Strasbourg.

The plan comes amid a diplomatic tug of war between Russia, which would like Serbia to maintain control of Kosovo, and the United States and its European allies which back the province moving towards independence.

German Foreign Minister Frank-Walter Steinmeier said that he expected Russia to back down on its desire for Serbia to hold on Kosovo.

"Russia knows how narrow the room for manoeuvre is," Steinmeier told the Financial Times. "If their preferred solution proves unworkable, the option of confirming Kosovo's future status in the UN Security Council must be possible and I hope for a constructive Russian role."

A key step

Ahtisaari's presentation Friday in a 90-minute closed-door meeting in Vienna, where European Union and NATO representatives were also present, was seen as a key step towards a solution.

On February 2, Ahtisaari, a former Finnish president, will travel to Belgrade and Pristina to present the proposal to the Serbian and Kosovo sides, who will then discuss it further before a final plan eventually goes to the UN Security Council, Jiang said.

Ahtisaari said his plan would focus on "the protection of minority rights, in particular of the Kosovo Serbs" and "a strong international civilian and military presence within a broader future international engagement in Kosovo."

He said his plan "provides the foundations for a democratic and multi-ethnic Kosovo in which the rights and interests of all members of its communities are firmly guaranteed and protected by institutions based on the rule of law."

NATO supportive

In Brussels meanwhile, NATO foreign ministers met Friday to look at ways to better coordinate security and civilian operations in the military alliance's two biggest missions, Afghanistan and Kosovo.

NATO Secretary General Jaap de Hoop Scheffer said the ministers would "discuss how NATO can best continue to play its crucial role in underpinning the political process" in Kosovo.

The ministers said it will stay the course in Kosovo with the NATO-led Kosovo Force maintaining its 17,000 troops.

In limbo

Fears have grown that any major delay in announcing how much autonomy Kosovo should be granted could inflame tensions and spill over into violence.

Kosovo has been in limbo for nearly eight years, since NATO intervened to halt a crackdown by Serbian forces against the ethnic Albanian population during a 1998-1999 war with separatist guerrillas.

Ahead of the status resolution, many argue that Kosovo cannot count on a viable future as an independent state because of its economy.

In bad shape

The province's economy is, if anything, in a worse state than in the post-war period when foreign donors opened their coffers for reconstruction. But this has dried up in the past two years.

Unemployment in Kosovo stands at 40-45 percent and is rising; around half its people live below the poverty line and annual per capita income is the lowest in the region at around 1,250 euros ($1,615).

"Real problems can emerge when the people start to think with their stomachs," journalist and economic analyst Ibrahim Rexhepi told AFP. "A social explosion is possible because leaders will no longer be in a position to give promises on independence to placate and pacify the tense province's two million people."

Political leaders in Pristina are convinced the economy will improve significantly when Kosovo becomes independent.

"Independence will help us," Kosovo Prime Minister Agim Ceku told AFP in an interview last week. "The undefined status was a big obstacle to tackling the economic challenges and issues. Kosovo is going to be an economically valuable and economically sustainable country."