Serbia has hired Tony Blair to work for Prime Minister Aleksandar Vucic, who once served in the same regime that was targeted by NATO air strikes advocated by the then British leader in 1999.

Tony Blair Associates "is helping the Serbian government to set up a delivery unit" to advise Vucic on carrying out reforms, according to a statement from the former British prime minister's consultancy.

"This project was directly negotiated and agreed between Serbia and TBA following meetings between Tony Blair and the Serbia prime minister and was not part of any wider agreement," the statement said.

Blair was a leading promoter of a NATO bombing campaign against Serbia over its repressive policy in Kosovo under Slobodan Milosevic's regime, in which Vucic was information minister.

A former top official of the ultranationalist Serbian Radical Party, Vucic is listed as an editor of a 2005 book entitled Engleski pederski isprdak Toni Bler (English Gay Fart Tony Blair) written by party leader and war crimes suspect Vojislav Seselj.

Vucic broke ranks with Seselj in 2008 and formed the Serbian Progressive Party. The pro-EU party is the dominant political force in Serbia.

As part of his agreement with Blair, the ex-premier's former top media strategist Alastair Campbell last month held a communications seminar for the Serbian government.

"At the government's request I was asked to meet government ministers and officials and to discuss strategic and communications challenges," Campbell wrote on his blog, adding that he "received a warm welcome and found the short trip fascinating."

Neither TBA nor the Serbian government have disclosed the cost and source of funding of the consultancy deal, but a source in Belgrade said it was allegedly paid by the United Arab Emirates.

"We (in the government) were told that it was funded by our Abu Dhabi friends," a Serbian government source told AFP.

Since returning to government in 2012 Vucic has promoted the UAE as a "close friend" and a top future investor in Serbia. UAE's investment plans include a multi-billion-euro plan to redevelop Belgrade's waterfront.

Serbia's links with Abu Dhabi have been facilitated by exiled Palestinian strongman Mohammed Dahlan, who lives in UAE and is a fierce rival of President Mahmoud Abbas.

In return for acting as go-between Dahlan and his family have been granted Serbian citizenship.

"The work of the delivery unit has no bearing on Tony Blair's role in the Middle East for the Palestinian economy," the TBA spokesperson said.

Blair is Middle East envoy of the Quartet, a diplomatic alliance established to further the Middle East peace process, which consists of the United Nations, the United States, the European Union and Russia.