Russia decided to allocate the money for the recovery of the conflict zone at a June 14 conference in Brussels, organized by the Organization for Security and Cooperation in Europe (OSCE) and the Joint Control Commission for the Georgian-South-Ossetian conflict resolution.
"Russia's joining conflict settlement processes in this form, bypassing mechanisms adopted in the OSCE, raises fears that instead of a purposeful financing of economic projects, the allocated funds could be used to militarize the Tskhinvali [S.Ossetia's capital] regime," the Georgian ministry said.
Bilateral relations between Russia and Georgia have deteriorated in recent months, with a key sticking point being the role of Russian peacekeepers in two conflict zones within Georgia - the breakaway regions of South Ossetia and Abkhazia.
The Georgian ministry said it was afraid that most part of the money would be used to directly finance the regime of the breakaway region's leadership. It added that Russia's decision was a step aside from the settlement plan coordinated and approved by OSCE member states in December 2005.
The ministry also said that all conference participants had repeatedly supported, unlike Russia, Georgia's territorial integrity and inviolability of borders.
A Russian representative said at the Brussels conference that Moscow was currently considering allocating additional 100 million rubles ($3.71 million) to the self-proclaimed republic, part of which could go to implement specific projects in coordination with the OSCE.
The Russian Foreign Ministry said Thursday the recent donor conference on South Ossetia, which resulted in a decision by donors to 7.9 million euros ($10 million) had been well-timed, and highlighted the role of the world's largest regional security organization in the forum.