"We are in talks with COVEC, in an attempt to get out of this dead-end. We've ordered the Chinese side to pay their bills immediately," ministry spokesman Mikolaj Karpinski told AFP.

"Radoslaw Stepien, our deputy infrastructure minister, has already had two meetings about this with COVEC chief Sang Yuanming, who came to Warsaw specially," he added.

In September 2009 COVEC -- the China Overseas Engineering Group Company -- beat several European competitors in the race to build 49 kilometres (30 miles) of the A2 highway linking the Polish and German capitals, Warsaw and Berlin.

The deal was a watershed, with experts underlining that it was the first large-scale Chinese construction and public works operation in the European Union. COVEC bid to do the work for what was considered a low price.

Work on the highway has been all but frozen since the start of the week, however, with Polish suppliers refusing to deliver construction materials to the site without being paid, an AFP reporter noted at the scene.

Poland's national highways agency, the GDDKiA, on Thursday insisted that the timetable for the construction was not under threat.

"There's no question of a delay, or a postponement of the target date," GDDKiA spokesman Marcin Hadaj was quoted as saying by Poland's PAP news agency.

COVEC was unavailable for comment.

Infrastructure Minister Cezary Grabarczyk meanwhile told reporters that a full analysis of the situation would be made by Friday.

"I can't believe that a Chinese group, for which the contract for the A2 motorway is a sort of entry-pass to the vast EU infrastructure market, wants to put at risk its future on the European market," he said.

The construction is part of Poland's ongoing issuing of tenders as it strives to upgrade its infrastructure in time to co-host the high-profile 2012 European football championships along with neighbouring Ukraine.

COVEC's role in the highway project had already sparked controversy. In January, 2010, Polish constructors alleged that they were the victims of dumping because the Chinese group's bid was so low.

They complained to the European Commission -- which polices competition rules across the 27-nation EU -- alleging that Beijing was subsidising Chinese firms in order to crack foreign markets.

They noted that at 1.3 billion zloty (330 million euros, 472 billion dollars), COVEC's winning bid was half the estimated cost of the tender.

Ex-communist Poland, a relatively large central European country of 38 million people that joined the EU in 2004, has a transport network which needs massive upgrading to bring it up to the standards of its Western neighbours.

The poor state of the infrastructure is a legacy of underinvestment during five decades of communism and of a failure to get enough road projects underway since the fall of the old regime in 1989.

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