Brussels: EU nations are set to suspend sanctions against Myanmar for a year, opening the way to a potential trade and investment bonanza with over 800 firms, European Union diplomats said on Thursday.

"There is now agreement in principle" to "a suspension of all sanctions, except for the arms embargo," said a diplomat close to the talks who asked not to be identified.

A formal announcement is expected at a meeting of EU foreign ministers on Monday in Luxembourg.

Despite reforms by Myanmar's military leaders, EU nations long remained split over whether to remove sanctions, with Germany urging a swift lifting but hawkish former colonial power Britain keen to maintain leverage in the still army-dominated country.

But in a joint policy-making call last week, British Prime Minister David Cameron and opposition leader Aung San Suu Kyi urged the suspension of all EU measures -- though not the scrapping of the sanctions.

Suu Kyi's endorsement of the suspension was seen as crucial.

The 12-month suspension period "gives us time to assess the sustainability of reform", a diplomat said. The ministers are expected to also agree to include the possibility of reviewing the decision in six months.

Western nations eager to reward sweeping reforms that culminated in Suu Kyi's election to parliament in April 1 by-elections, have already made some reciprocal gestures to encourage Myanmar's government.

Once in place, the suspension opens up what many investors see as the next big frontier to European firms.

In all, the 27-nation bloc had slapped a travel ban and assets freeze on 491 people but early this year eased the measures, notably suspending visa bans against members of the government.

A total 59 firms and utilities remained targeted by an asset freeze while trade and investment restrictions were imposed on more than 800 companies, many involved in lucrative logging and mining, as well as on 52 enterprises controlled by the regime.

The bloc's foreign policy chief Catherine Ashton this week said she would travel to Myanmar on April 28-30 and had invited the South-east Asian state's foreign minister to
Brussels.

(Agencies)