* UK says Rwanda has engaged constructively on peace moves
* Congo criticises British move, calls it "dangerous"
By Jonny Hogg
KINSHASA, Sept 4 (Reuters) - Britain will unfreeze about half of its aid to Rwanda after the central African state made constructive efforts to solve a conflict in nearby Congo, the UK government said on Tuesday.
Congo officials criticised the move, saying Rwanda had fuelled the bloodshed in its much larger neighbour.
Britain and other donors, including the United States, Sweden and the Netherlands, suspended support to Rwanda - which relies on foreign aid for half its budget - after a United Nations report in June accused officials in Kigali of backing rebels fighting in the east of Democratic Republic of Congo.
A spokesman for Congo's government said Britain's decision was "totally disastrous". Kigali has repeatedly denied the allegations that it backs rebels in Congo and accused the authors of the U.N. report of bias.
Andrew Mitchell, the UK's outgoing international development minister, praised Rwanda for "constructively" engaging in efforts to resolve the crisis that has displaced 220,000 people since April and undone three years of relatively improved relations between longtime adversaries Congo and Rwanda.
"Given this progress and recognising that the government of Rwanda has continued to demonstrate its strong commitment to reducing poverty and improving its financial management, Britain will partially restore its general budget support to Rwanda," Mitchell said in a statement.
Mitchell said the decision to release only around $12 million of the $25 million in blocked aid reflected continued concerns about Kigali's alleged backing for the rebels.
Britain has long been one of Rwanda's staunchest allies and its suspension of funds underscored deep international frustrations at outside meddling in Congo's recurrent crises.
Rwanda has repeatedly sent soldiers into its unstable neighbour during the last two decades, citing a need to tackle Rwandan insurgents operating out of Congo's eastern hills.
But critics say security threats are used as a front for lucrative economic and political networks in the region.
Lambert Mende, a spokesman for Congo's government, swiftly criticised London's move. "We do not share their analysis (of the situation)... This will not help to resolve the problems in the region. We'll speak to express how extremely dangerous we think their decision is," Mende told Reuters by telephone.
Last week Congo called for U.N. sanctions against senior Rwandan figures alleged to be backing the rebels.
Ties between the two countries had improved after a 2009 Rwandan-backed deal to integrate previous Kigali-linked rebels into Congo's armed forces and some joint operations between the two countries to tackle Rwandan Hutu FDLR gunmen.
But rebels accuse Kinshasa of failing to stick to the deal.
Last week, Rwanda withdrew more than 300 soldiers from eastern Congo who had been fighting covert missions alongside Congolese troops, saying the situation on the ground made their continued presence impossible.
There has been a lull in fighting in the past few weeks but an international "neutral force" due to be dispatched to the region has not yet materialised.