European firms and governments are playing a significant role in the funding of conflict in the Central African Republic (CAR) through aid and the timber trade, according to a new report.

The NGO Global Witness has calculated that in 2013, around 3.4 million euros ($3.74 million) was paid to rebels as bribes, to pass roadblocks, for armed escorts and for the protection of logging sites.

Two years ago, Muslim Seleka rebels seized power in CAR, and many fighters were ordered to the country's rainforests to generate funds to continue fighting the rebellion. They quickly struck lucrative deals with European and Chinese timber companies.

Seleka rebels have since been swept from power and a transitional government has been installed. But another armed group, the anti-balaka, is now benefiting from regular payments, their report said.

'Blood Timber' in Central African Republic

Titled "Blood Timber," the paper singled out Germany's Johann D. Voss, IFB and Tropica-Bois from France as three traders who allegedly played a key role in paying off rebels. France, Germany and China are the biggest buyers of timber from the Central African Republic.

The French government was also criticized for paying out millions of euros in development aid to CAR's logging companies.

EU member states are also failing to keep illegal timber off European markets, with most of CAR's wood going to Germany, France and the UK, the report highlighted.

Global Witness has called for EU countries to cut trade and aid to the rebels and for the EU to delay talks with the CAR on a timber trade agreement until the country is on a more stable footing.

CAR was a major exporter of diamonds until it was banned from the shipment of rough diamonds under the UN rule that prevented so-called "conflict diamonds" from entering the market.

The conflict in the Central African Republic has left more than 5,000 people dead, while more than a million people have been displaced.

mm/jil (Reuters, Global Witness report)