Pahor told Croatian public broadcaster HTV last night that foreign ministers Karl Erjavec and Vesna Pusić would start sorting out the dispute under the sponsorship of the Bank for International Settlements (BIS) in Basel at the end of May or in June.

The pair is expected to be joined in their efforts by financial experts France Arhar of Slovenia and Zdravko Rogić of Croatia, who have been working on a solution so far.

Pahor said yesterday that it had been a "lucky coincidence" that a hearing was scheduled at a Zagreb court in one of the cases in which Croatian banks are suing the LB bank and its Slovenian successor NLB at the start of his visit yesterday.

The hearing was scheduled despite Croatia's promise that it would stop the lawsuits over alleged debt to Croatian LB savers immediately after the signing of the Mokrice Memorandum on 11 March, which cleared the way for Croatia's EU entry.

According to Pahor, this contributed to the agreement with Croatian officials that the LB issue should be solved in Basel as soon as possible.

Pahor's host Ivo Josipović pointed out yesterday that the Mokrice Memorandum was an international treaty and was therefore above national legislation which the Croatian banks refer to in their argument that the lawsuits should continue.

The next hearing in one of the LB cases is scheduled for 10 June.

After the meeting with Milanović, Pahor again met Josipović today, as the pair addressed a Slovenia-Croatian business forum.

The presidents highlighted the importance of solving open issues between their countries for business and for Slovenia and Croatia's joint entering the third markets.

Pahor also pointed to the revival of the Brdo Process of regional cooperation and the idea of a regional business pool that would include Slovenia, Croatia and several Austrian, Italian and German regions.