"The project is suspended and talks with Indonesia are not expected in the near future," Lee Yuan-ho, a senior official of the Taiwan cabinet's Council of Agriculture who was overseeing the aid scheme, told Reuters by telephone.

"After what happened to ethnic Chinese in Indonesia, people here are hesitant to help that government," Lee said.

On Wednesday, Indonesia unveiled its rice import plan for the April 1998 to March 1999 fiscal year, saying it would import 200,000 tonnes of rice from Taiwan under a 10-year soft loan.

On Thursday, an Indonesian official said they had not been informed of Taipei's decision to suspend the aid scheme but expressed confidence that Taipei would stand by its commitment.

In May, at the height of rioting in Jakarta and other cities that brought down longtime strongman Suharto, the Taiwan farm council pledged to make 200,000 tonnes of rice available on concessional terms in a diplomatically friendly gesture.

Proposals have included a barter deal in which Taiwan would provide the rice in exchange for Indonesian natural gas, the 10-year soft-loan deal cited by Jakarta and even an outright grant of the grain.

The 200,000 tonnes of rice would be worth about $50million.

Relatively unscathed in Asia's financial turmoil, Taiwan has sought to use its Financial muscle to defy a diplomatic embargo enforced by communist China, its arch adversary.

Beijing has warned the countries of Southeast Asia not to let the wealthy Nationalist-ruled island exploit their troubles for its political gain.

That was before Indonesia's political riots in May.

The rice deal has faced growing opposition amid reports that widespread attacks on ethnic Chinese Indonesians included not only firebombings, lootings and other destruction but rapes and other deliberate human degradation.

Civic groups in Taiwan and other Chinese communities around the world denounced Indonesia's military and police for tolerating and, by some accusations, abetting such atrocities.

Taiwan's foreign ministry has strongly condemned the violence, saying it badly undermined the willingness of Taiwan businesses to invest in financially battered Indonesia -- just at the time it needs it most.

Taiwan business leaders have urged investors to withdraw plans for investments in Indonesia.

In 1997, Taiwan was the sixth biggest foreign investor in Indonesia with investments worth $13.284 billion, economic ministry officials said.

Human rights groups in Indonesia estimate 1,200 people were killed and more than 150 ethnic Chinese women systematically raped during the May 13-15 riots that toppled Suharto.

Though they make up only four percent of Indonesia's 200 million population, ethnic Chinese control the bulk of the Moslem-majority nation's non-land wealth and are bitterly resented.

Like the rest of Asia, Indonesia recognises only the communist People's Republic of China in Beijing, not Taiwan's exiled Republic of China.