Germany and Italy have announced that they are writing off close to $500,000-worth of Malawi's debts.

Malawi is currently suffering from a devastating famine, with up to three million people needing food aid.

Donors deny exacerbating the food crisis

The debt write-off is some rare good news for the government of President Bakili Muluzi, which has a troubled relationship with donors.

Other western countries suspended development aid imposed last year, after reports that previous aid had not been used properly.

On Tuesday, the United Nations food agency launched a $500m appeal so it can buy food to avert the growing threat of famine across southern Africa.

The head of the World Food Programme, James Morris, says the agency needs to purchase one million tonnes of food to help over 12 million people to survive until the next harvest.

Despite their announcement, Germany and Italy warned that continued aid to Malawi depended on good governance.

The IMF is withholding $47m of the $55m earmarked for Malawi due to concerns about possible corruption and poor management.

Hundreds of people died from starvation earlier this year and aid agencies warn that food aid is needed quickly to avert a disaster.

Third term

The food crisis was exacerbated by the government's decision to sell off most of its grain reserves last year.

Malawi, however, says that it was acting on advice from the IMF - an accusation the organisation denies.

Muluzi's supporters want him to stay on

Supporters of President Muluzi are currently pushing for a change in the constitution, to allow him to run for a third term in office.

His second mandate is due to expire in 2004.

"Germany joins the United States, Britain and the European Union in urging Malawi to allow a full and wide-ranging public debate, conducted in an atmosphere free from intimidation or retribution, before any far-reaching constitutional decisions are taken," said Franz Ring, Germany's ambassador to Malawi.

This is seen as a warning to Mr Muluzi, who recently banned demonstrations related to the third term issue.