WASHINGTON, Aug 4 (Reuter) - Holiday Inn Worldwide has announced it will not renew its management contract at the Holiday Inn Lhasa in Tibet when it expires in October, a San Francisco-based pro-Tibetan group said on Monday.

The Milarepa Fund, a group seeking to end Chinese control of Tibet, said it received a statement from Craig Smith, the company's vice president of corporate affairs, in which he said the hotel chain would end its management role this fall.

"The multi-year contract under which Holiday Inn Worldwide has managed the Holiday Inn Lhasa is due to expire this fall. Holiday Inn will not be renewing this agreement and will cease its management role at the property in October 1997," the group quoted Smith as saying.

No comment was immediately available from the company, which is headquartered in Atlanta and is a subsidiary of British drinks and leisure company Bass Plc (BASS.L).

The fund said the decision came in the face of an international boycott of Holiday Inn for the chain's direct partnership with the Chinese government in managing the Lhasa hotel. The boycott was launched in 1993 by the Britain-based Free Tibet Campaign and is backed by 50 groups around the world.

"I think their withdrawal sets a precedent for other corporations that are considering going into Tibet," Leda Nornang, boycott coordinator of Students for a Free Tibet said in a statement.

Boycott organisers have alleged that Holiday Inn discriminated in its hiring practices, allowed the Chinese government to tap phones and faxes at the hotel, and distributed Beijing literature that "misrepresented the nature of the occupation of Tibet," the Milarepa Fund said.

U.S. Secretary of State Madeleine Albright last week said she planned to appoint a special coordinator to oversee U.S. policy toward Tibet, a move that may anger China. The coordinator would be appointed by Nov.1, Albright said.

President Bill Clinton met exiled Tibetan spiritual leader the Dalai Lama at the White House in April and urged China to open a dialogue with him. China criticised the meeting, saying the United States was interfering with Chinese internal affairs.