The Zimbabwe government has agreed on how to use a 400-million dollar grant from International Monetary Fund (IMF), after months of feuding about its allocation, a minister said on Wednesday.

"Last week cabinet did approve the distribution of this money, which will be used in the completion of public works programs," said Industry Minister Welshman Ncube.

"We agreed that 150-million dollars (100-million euros) should go to productive sectors such as mining and manufacturing," he added.

In September, Finance Minister Tendai Biti clashed with central bank boss Gideon Gono over the use of the money.

Biti wanted the funds, which were availed in August, to be put into the country's annual budget, which he is expected to present to parliament in November.

Gono had insisted that he wants the money be used to boost the mining and manufacturing industries, as well as public entities.

The decision was taken at a cabinet meeting on 13 October, before the Movement for Democratic Change (MDC) boycott of government business that now threatens the eight-month-old unity regime.

According to Ncube, part of the money would be used to complete the refurbishment of the Bulawayo airport and repair roads and state hospitals.

Zimbabwe's public infrastructure has been battered by a near decade of political turmoil which crippled the economy and halted investment.

The country has not received any financial assistance from the IMF in over a decade, due to its long outstanding debt with the agency.