The International Criminal Court has issued arrest warrants for Sudanese President Omar al-Bashir on charges of genocide, crimes against humanity and war crimes. (Abdel Magid al-Fergany/Associated Press)

Malawi won't host an African Union summit next month after a dispute over the southern African country's refusal to host Sudan's leader, who faces war crimes charges, the vice president said Friday.

"Much as Malawi has obligations to the AU, it has also other obligations," Vice President Khumbo Kachali said in a statement on state radio. "The Cabinet has decided not to host the summit."

Earlier, according to Kachali, the government had received a letter from the AU saying that it had no right to dictate who could attend the AU summit set to open July 6, and if it insisted on barring Sudan's Omar al-Bashir, the summit would be moved to AU headquarters in Ethiopia. Summits normally rotate among AU members states.

Joyce Banda has steered an independent path for Malawi since stepping in as president in April after the sudden death in office of Bingu wa Mutharika. Mutharika had welcomed al-Bashir at a regional summit last year.

Sudan's al-Bashir has visited African, Asian and Middle Eastern countries despite International Criminal Court warrants for his arrest on charges of genocide, crimes against humanity and war crimes in Sudan's Darfur region.

Speaking at a news conference in May, Banda said a visit by Sudan's president would be frowned upon by Malawi's international donors.

Banda has worked to repair ties with donors strained by her predecessor. Earlier this week, the International Monetary Fund said it and Malawi had agreed to a three-year, $157 million US aid package. The IMF had described its work in Malawi as off-track under Mutharika, who had refused to devalue the currency as the IMF had advised. In May, Malawi devalued its currency by one third.

Last month, Britain said its central bank would work directly with the Reserve Bank of Malawi to help it cope with the impact of currency devaluation. Also last month, Britain -- a former ruler of Malawi -- pledged 20 million pounds ($32 million) to help stabilize the Malawian economy and 10 million pounds for the country's health system.

Last year, Mutharika expelled Britain's High Commissioner to Malawi after the envoy was quoted in a local newspaper as expressing concern that the president was increasingly intolerant of criticism and asserting that human rights were under attack. Britain, then indefinitely suspended aid to Malawi, which in the end invited the envoy back.