Ian Timberlake, Dili – East Timor's leadership plans to start paying volunteer public servants as part of measures to ease growing frustration over the lack of progress since Indonesian rule ended.

The National Consultative Council (NCC) has also agreed to create a central fiscal authority which will be the foundation for a finance ministry.

The decision came as violence erupted at the weekend among a crowd of 7,000 people waiting to be interviewed for 2,000 United Nations jobs in Dili, with UN staff and soldiers pelted with stones.

An Australian commander in the UN's civilian police force, Mr Fred Donovan, said: "I estimate there were about 7,000 who got somewhat out of control while they were waiting to be interviewed for jobs, and it became fairly nasty for a while."

The crowd had become impatient with the slow pace of interviewing applicants, he said. Locals said the crowd was also angry that proficiency in English was a requirement for the jobs. Few East Timorese speak much English.

The violence subsided after the pro-independence figure Mr Jose Ramos Horta addressed the crowd, asking for calm.

Mr Sergio Vieira de Mello, who heads the UN Transitional Administration and chairs the NCC, said the council's proposed fiscal authority needed to be in place before donor countries would provide financial support.

Donors were also waiting for a reconstruction and development plan that the NCC approved and which would be reviewed this month in Washington.

Mr De Mello said these measures, particularly the public service payments and the fiscal authority, were important in the light of an "obvious increase in the expectation and frustration of the local population, with a rise in criminality and possible social unrest".

The NCC agreed to begin payments to people who have been doing volunteer public service in the education, health, water and electrical sectors.

The payments will range from 538,000 rupiah ($114) a month for unskilled workers to 2.2 million rupiah a month for judges and department heads.

East Timorese, international and Australian officials met yesterday to discuss a Timor Gap oil treaty that may be signed by the end of next month. It divides the Timor Gap into three zones, with Indonesia and Australia managing one zone each of the oil- rich waters, and the third zone under joint administration.