The EU will increase its aid to Pakistan to 50 million euros ($63 million) over the next three years

The money is to be directed at boosting EU programs in the field of education, trade and farming in Pakistan's north-west, a tribal area bordering Afghanistan.

"The border area is very important," Ferrero-Waldner said, noting that educational programs were particularly important in a destitute part of the country that is also a breeding-ground for terrorists.

Her comments came as EU foreign ministers were meeting in Brussels to discuss ways of enhancing the bloc's ties with Pakistan following the end of emergency rule by ex-president Pervez Musharraf and its slow return to full democracy.

Ferrero-Waldner said a free-trade deal will be discussed in 2009.

Meanwhile, the EU is about to send a ministerial-level group of diplomats to Islamabad with the aim of boosting political dialogue, officials said prior to Monday's meeting.

EU foreign ministers, meeting in Brussels on Monday, were also expected to commit themselves "to intensify political dialogue and deepen relations with Pakistan," according to a draft statement prepared for the talks.

"The EU will jointly explore with the government of Pakistan how to intensify dialogue in the areas of trade and development, intercultural exchange, non-proliferation, human rights, migration, counter-terrorism and radicalization and education," added the text.

Acknowledging the "complex and urgent challenges Pakistan is facing", the ministers will look to develop political dialogue through a visit soon to Pakistan by a delegation including EU foreign policy chief Javier Solana.

The possibility of "consultations taking place at the highest level" will also be considered.