THE HAGUE (Reuters) - The chief prosecutor of the court examining war crimes against ethnic Serbs in Kosovo in the late 1990s will step down next month, which experts said on Friday will delay efforts to indict the first suspects.

Chief prosecutor David Schwendiman said he would step down on March 31 as prosecutor of the Kosovo Specialist Chambers in The Hague because his three-year term as a U.S. State Department foreign service official cannot be renewed.

The court is handling cases of alleged crimes by Kosovo Liberation Army (KLA) guerrillas between 1998 and 2000 that were not dealt with by the U.N. Yugoslavia tribunal, which closed in December. It has yet to hand down any indictments.

In a statement on Thursday, Schwendiman said his departure does “not signal a change in policy or commitment to the work of the specialist prosecutor’s office”.

But experts said Schwendiman, who has led investigations into possible atrocities in Kosovo for years and was thought to be close to issuing his first indictment, would be difficult to replace.

“This is undoubtedly a setback,” said Iva Vukusic, a war crimes expert at the University of Utrecht who follows the Kosovo court closely.

“What the institution needs now is stability, as it is getting ready to indict, and as it faces attacks from certain politicians in Kosovo.”

The court said Schwendiman’s deputy Kwai Hong Ip will fill his job on an interim basis.

Schwendiman’s departure comes shortly after a group of Kosovo lawmakers hostile to the court gave up an attempt to repeal the law that created it, bowing to pressure from the European Union and United States.

Kosovo declared its independence from Serbia in 2008, nearly a decade after a NATO bombing campaign drove out Serbian troops. NATO launched the action in response to atrocities committed by Serbian forces against Kosovo’s ethnic Albanian majority during a two-year counter-insurgency war against the KLA.

While crimes committed by Serbian forces were punished by the Yugoslavia tribunal, incidents carried out by the KLA were mostly not covered. The Specialist Chambers were set up as part of Kosovo’s own legal system, but based in the Hague and employing international jurists to guarantee its independence from political influence.