ROME, July 25 (Reuter) - Italy's agriculture ministry said on Thursday it had reached agreement to compensate fishermen who stop using illegal drift nets. Italy's 500-strong fishing fleet has been harshly criticised by European Union officials for regularly flouting EU regulations limiting drift nets to 2.5 km (1.5 miles) in length. The United States threatened in March to impose sanctions on Italian fish product imports, worth around 1.8 trillion lire ($1.19 billion), if Italian fishermen continued to break the regulations on tuna and sword-fish drift net fishing. Agriculture Minister Michele Pinto said the European Union and the Italian government had allocated 350 billion lire ($230 million) to help some 3,500 fishermen, mainly in southern mainland Italy and Sicily, to invest in new equipment and training. "The ministry has ensured the availability of EU funds to put an end to the diplomatic disagreement with the United States," Pinto said in an official statement. The money will be available over a perio

d of three years to fishermen who volunteer to convert their operations away from drift nets, which are blamed for depleting stocks of dolphins and whales in the Mediterranean. Earlier this month European Union Fisheries Commissioner Emma Bonino said a complete drift net ban was essential, since nets within the legal limit were not economically viable and so most Italian fishermen were regularly breaking the rules. A European Union Commission's proposal for a total ban by January 1998 has been on the table since 1994, but has so far been opposed by all the member states except Spain and Greece.