BELGRADE, Nov 15 (Reuters) - Serbia reacted angrily on Thursday to a report by a disability rights group which says its mental institutions routinely use restraints that are tantamount to torturing helpless patients.

Prime Minister Vojislav Kostunica said the report by Washington-based Mental Disability Rights International (MDRI), entitled "Torment not Treatment", was fabricated slander.

"We are witnessing systematic propaganda saying Serbia is full of fascism," he said in a statement. "Now we have camps for helpless children."

Kostunica said the timing of the report, which comes as Serbia battles with the West to prevent the independence of its breakaway province of Kosovo and advance its bid to join the European Union, was "not accidental".

He vowed to fight back to clear his country's name but also said his government would establish a commission immediately to investigate the situation in long-term mental institutions.

TIED UP

The report on half a dozen institutions for mentally handicapped children cited "filthy conditions, contagious diseases and lack of medical care and rehabilitation."

It said MDRI investigators who conducted a study over four years found children and adults tied to beds, and children not allowed to leave their cribs for years.

It was particularly critical of what it said was the widespread use of physical restraints.

"There are no enforceable laws or regulations regulating the use of physical restraints in Serbia, and there is no oversight to prevent the abuse of this potentially torturous practice."

"As a result, individuals may be left in restraints for days, weeks or years. In severely understaffed institutions, restraint is used for the convenience of staff who cannot provide adequate individual attention."

It said the Serbian government had no plan or programme to end such treatment and urged the EU to take action.

Health Minister Tomica Milosavljevic questioned the veracity of the report and the pictures used by MDRI and said he had "the feeling that there is too much politics involved in it".

But ultranationalist Radical party leader Tomislav Nikolic, usually quick to spot a Western-inspired attack on Serbia, said the state must investigate the situation.

"I assume part of the report is true, part is not. It is brutally written," Nikolic told reporters. But the job of the government was "not to criticise the report, but to inform the public on the situation as it is".

Labour and Social Policy Minister Rasim Ljajic invited international organisations and embassies in Belgrade to visit the institutions, Beta news agency reported.

"If everything written in the report is true, if its essence is true, then we're all accomplices in a crime and we should all go to jail," Ljajic said. "The situation ... is far from great, but it's not even close to that described in the report."

(Reporting by Bane Filipovic; writing by Douglas Hamilton)

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