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SARAJEVO - Bosnia is facing an outflow from its politically sensitive multi-ethnic armed forces (OSBiH) due to the failure of political institutions to approve adequate funding, the Balkan country's military commissioner warned on Tuesday.

The formation of the OSBiH in 2005, assisted by NATO and the EU peacekeeping force EUFOR, has been hailed as the country's biggest achievement since the end of Bosnia's war in the 1990s, uniting former foes and promoting national stability.

 So far this year around 450 people, including those employed in civilian roles, have left the 11,000-strong armed forces, according to the defense ministry, though it noted many had retired, died or changed jobs.

"The system is collapsing from within because status issues are not being resolved and the politicians are not interested to solve them," Bosko Siljegovic, the parliament's military commissioner, told Reuters on the margins of an international conference.

The OSBiH, which brings together Bosniaks, Bosnian Serb and Bosnian Croat elements, is under the supreme command of the country's tripartite inter-ethnic presidency and the national parliament.

For years the force has been praised as the prime example of reconciliation, but its dwindling appeal among the young is shown by a drop in applicants for each job to two from 13 previously.

"Low salaries are the main problem, they are lower than in regional police forces or state services of the same rank," said Siljegovic. "That is why we have a major outflow of soldiers and officers from the OSBiH."

Salaries of soldiers, which previously stood at around 400 euros a month, have been cut to about 300 euros. Lower-ranking army officers are paid around 400 euros and mid-officers around 550 euros.

Legislation proposing a wage rise has been blocked in the national parliament, which has not been convening due to bickering over the formation of a cabinet after last October's national election.

Bosnian Serb leader Milorad Dodik, who is serving as a Serb member in Bosnia's three-man presidency, has questioned the role of the OSBiH in Bosnia's autonomous Serb-dominated region, calling for a stronger regional police force instead.