DAKAR (Reuters) - Former Liberian President Charles Taylor may walk free because the global financial crisis has cut donations to the court trying him for war crimes committed in neighboring Sierra Leone, its chief prosecutor said.

The U.N.-backed Special Court for Sierra Leone, which is pursuing those held most responsible for atrocities during the country's 1991-2002 civil war, faces a budget shortfall of more than $5 million from May, officials said.

With the economic crisis continuing, to get funds is not easy ... If we run out, it is now possible the judges will have to release him. That's our real anxiety, Chief Prosecutor Stephen Rapp told Reuters in a phone interview late Monday.

Taylor, a warlord in a civil war in Liberia and later president, is being tried in The Hague due to fears a local trial may threaten regional stability. He denies all 11 counts of crimes against humanity and other charges including rape, enslavement and conscripting child soldiers younger than 15.

The main section of the court sits in Sierra Leone's seaside capital Freetown and, together with the proceedings regarding Taylor in The Hague, is funded centrally.

Taylor's trial, which began in June 2007, involves the same Special Court judges and prosecutors and he would stay indicted even if freed for lack of funds for his detention. Rapp had said earlier this month a verdict could be expected early next year.

The Freetown session of the court is due to hand down its last verdict Wednesday, in the trial of the three most senior surviving members of the rebel Revolutionary United Front (RUF).

The defendants may become the first people in the world convicted for attacks against peacekeepers and forced marriage.

The Special Court has already scored several legal firsts, ensuring the recruitment of child soldiers is now recognized as a crime under international humanitarian law, alongside forced marriage and acts of terrorism against civilians, Rapp said.

In terms of writing the law, this is one of the most active courts there's ever been, he said from Freetown.

THE REALLY BIG ONE

Of nine surviving indictees, five have already been convicted of war crimes. Four of the most senior indictees bar Taylor died or disappeared before they could be tried or judged.

The really big one, we allege, is there in The Hague -- that's Charles Taylor, Rapp said.

We allege he led the RUF into Sierra Leone in 1991 and was their effective leader for much of the conflict.

Drug-crazed rebels hacked off villagers' limbs with machetes and over 50,000 people were killed in Sierra Leone's 1991-2002 war, made infamous by the 2006 movie 'Blood Diamond'.

Officials fear lack of funds will jeopardize the court, the first of its kind, relying on voluntary contributions from donor governments to foot the entire bill for the proceedings, estimated to run to $68.4 million for 2008-2010 alone.

A few important donors have so far not been able to provide financial support to the Court or have provided less than in previous years, Court Registrar Herman von Hebel told Reuters.

These countries include Ireland, France and Germany, as these have always been important donors to us, but there are other donors as well, he wrote in an email.

Britain's contribution of about 3 million pounds a year has slipped by $1.6 million in value due to the pound's depreciation.

The court is now turning to a few countries in the Middle East for funding, as well appealing to U.S. President Barack Obama's new administration for speedy help to raise a further $30m to see it through to the end of 2010, von Hebel said.

(Editing by Alistair Thomson; Editing by Charles Dick)

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