Egyptian investigating judges today referred 43 NGO workers, including 19 Americans, to trial before a criminal court for allegedly being involved in banned activities and illegally receiving foreign funds, security officials said.
US Secretary of State Hillary Rodham Clinton warned Egypt's foreign minister in Germany that failure to resolve the NGOs crisis may lead to the loss of American aid.
The official MENA news agency was quoted as saying in media report that the group also includes Germans, Norwegians, Serbians, Jordanians and Palestinians.
"We are very clear that there are problems that arise from this situation that can impact all the rest of our relationship with Egypt," Clinton told reporters in Germany.
"We do not want that. We have worked very hard this past year to put in place financial assistance and other support for the economic and political reforms that are occurring in Egypt," she said.
The NGOs workers have been accused of "setting up branches of international organisations in Egypt without a licence from the Egyptian government" and of "receiving illegal foreign funding."
The ruling Egyptian military council, which took power after the ouster of president Hosni Mubarak last February, has accused interbnatinal groups of funding street protests against them.
In December, Egyptian authorities raided 17 offices of local and international NGOs, as part of a probe into allegations of illegal foreign funding.
The latest move to put on trial 44 people, including 19 Americans, will strain US-Egypt ties after the offices of several non-governmental organisations, including US groups International Republican Institute, the National Democratic Institute and Freedom House, were raided. Meanwhile, Egypt showed no flexibility in its position in the spat with the US.
Responding to Clinton's warning, Egypt's foreign minister Mohammed Amr said the government can't intervene in a probe.
"We are doing our best to contain this but..... we cannot actually exercise any influence on the investigating judges right now when it comes to the investigation," he told reporters in Munich.
He insisted that "the executive branch has nothing to do" with the investigation.
Among Americans barred from leaving Egypt is Sam LaHood, the head of the Egypt office of the Washington-based International Republican Institute and the son of U.S. Transportation Secretary Ray LaHood.
Under American law, Clinton must certify to Congress that Egypt is meeting certain requirements, including enacting democratic and rule of law reforms, in order for the assistance to be released.
With the US voicing concerns about the NGO workers and the military's commitment to democratic reform, it could call into question additional funding sources from the European Union, for example, which also wants to see Egypt make faster democratic reforms.
Washington is due to give Egypt USD 1.3 billion in military assistance and USD 250 million in economic aid in 2012.
A loss of that funding would be a blow to Egypt's military rulers and the interim government, who already are struggling to meet the country's needs.
The uprising a year ago set in motion a downward fiscal spiral from which Egypt has yet to emerge. Tourism and foreign direct investment, two key foreign revenue mainstays, have been hit hard.
To cope with a budget deficit, seen by many analysts as widening past the 8.6 percent of GDP which officials are targeting, the government has reached out again to the International Monetary Fund (IMF) for a USD 3.2 billion loan.
It has also submitted a request to the World Bank for USD USD1 billion. The IMF funding is seen as key to Egypt securing billions more in aid from other institutions