Congo is ready to cancel more than half its timber contracts to protect the world's second biggest tropical forest but it wants more aid from foreign governments to help do so, the environment minister said.

Democratic Republic of Congo is carrying out a World Bank-sponsored review of 156 logging deals, most of them issued during the vast country's 1998-2003 civil war and a subsequent three-year transitional government.

Congo issued a five-year moratorium on new logging contracts in 2002 in an effort to stem rampant deforestation aggravated by the conflict. That measure went largely unheeded and companies continued to sign new deals.

Around three million hectares (7.4 million acres) of illegal concessions have already been cancelled by Congo's new government, which took office this year after historic post-war elections in 2006.

We have between 24 and 25 million hectares still held by individuals and companies. I would say that I am capable of cancelling another 12 to 15 million hectares of contracts. That's the minimum, Environment Minister Didace Pembe told Reuters.

Anyone who doesn't conform to the criteria, those that signed logging contracts during the moratorium and are unable to justify how, we are going to cancel their contracts, he said.

All those who have forestry concessions but don't pay their taxes, we are going to cancel them, he said in an interview late on Thursday, without citing any companies or individuals.

Amongst the biggest timber firms operating in Congo are a subsidiary of Germany's Danzer Group, Siforco, and Portuguese-owned Sodefor, a unit of holding company NST. Together with a third company, Safbois, they account for over two-thirds of the country's capacity, researchers say.

G8 INITIATIVE

Congo hopes to receive up to $6 billion a year under an international conservation scheme which would provide financial incentives to preserve the forests in the future, the minister said.

At the G8 summit in Germany this month, leaders from the world's eight richest countries proposed a Forest Carbon Initiative to give developing countries financial incentives to combat global warming.

Cutting and burning tropical forests contributes 20 percent of the overall carbon emissions that are accelerating climate change.

Logging and land clearing for agriculture are eating away at the ecosystems of the Congo Basin forest, which are being degraded at the rate of more than 800,000 hectares every year.

The initiative would create a fund to compensate developing nations like Congo, with the world's second largest tropical forest after the Amazon, for not granting logging concessions.

When we see the benefits this forest brings ... to the entire planet, it is about time the major world powers think about compensation for everything this forest does, Pembe said.

Fair compensation, he believes, could inject around $6 billion dollars a year into Congo's coffers -- a massive windfall for a country with a total proposed 2007 budget of just over $2 billion.

That will be an enormous way for us to pull ourselves up, Pembe said. You risk pushing us to destroy our forests because we need money. They say we are the second lung, but that second lung has to be taken care of.

Germany Earth