WASHINGTON (AFP) - US President Barack Obama announced a US$450 million (S$633 million) plan to fund Colombia's peace process on Thursday (Feb 4), shaking up a controversial military aid program that defined relations for 15 years.

Hosting President Juan Manuel Santos at the White House, Mr Obama said that as the country's 50-year conflict with leftist FARC guerrillas winds down, it was time to rethink "Plan Colombia."

"A country that was on the brink of collapse is now on the brink of peace," Mr Obama said, expressing optimism that an agreement can soon be reached.

A March 23 deadline has been set for the peace talks to conclude, designed to bring to an end a conflict which has killed more than 220,000 people and displaced six million.

Over the last decade and a half, Plan Colombia caused billions of dollars' worth of military aid to flow to Colombia's security services, fortifying the state against well-armed and well-funded drug cartels and rebel groups, chief among them the FARC.

Hailed in Washington as a bipartisan success story, Plan Colombia was launched by former president Bill Clinton and continued by his Republican successor George W. Bush.

But the policy has also been fiercely criticised inside Colombia and by rights groups, who say it made internecine conflict bloodier and left a trail of abuses.

"For many Colombians directly affected by the conflict, Plan Colombia is shorthand for a war without quarter," said Ms Gimena Sanchez of the Washington Office on Latin America, a non-profit group.

Under the newly styled "Peace Colombia," the White House said there would still be cash for the military and counternarcotics, but the focus would also be on demobilising rebels, mine clearance, humanitarian assistance and funding truth and reconciliation efforts.

"Just as the United States has been Colombia's partner in a time of war," Mr Obama said. "We will be your partner in waging peace."

Once a virtual failed state, Colombia is increasingly seen as a pivotal player in Latin America and one of the region's most dynamic and democratic countries.

"Today's Colombia is much, much different from the Colombia of 15 years ago," said Mr Santos.

"Practically a third of our national territory was controled by paramilitaries. Another third was being controled by the guerrillas, and both were financed by drug trafficking. We had a very dark and uncertain future.

"Today, we see the future with hope," he said

Mr Obama has made common cause with Mr Santos on a range of issues from climate change to peacekeeping and the White House is betting a more peaceful Colombia could play a larger regional role.

Recasting Plan Colombia is just the latest move by Mr Obama's administration to cast off policies borne of the Cold War era.

Mr Obama has also moved to normalize relations with Cuba, long a point of contention with the entire region.

Some are calling on the United States to go further, by examining the legacy of Plan Colombia and its own role in Colombia's long and dirty war.

Ms Virginia Bouvier of the US Institute of Peace said the US could help by declassifying documents and offering transparent information about events that haunted Colombia's past.

"The US has collected lots of information that could be helpful to the Colombians in trying to sort out exactly what happened, including some violations during the war," she said.

"We call on other countries to search for the truth as a mechanism for assuring stability, justice and non-repetition of wars." She added: "The US has certainly made mistakes - in wars there are no clean hands."

But with long-standing allegations of collusion between US-backed leaders and right-wing militias, declassification is likely to be deeply contentious inside Mr Obama's administration.

"We have had no requests nor have we had any discussion to release documents," said US envoy to the peace process, Bernard Aronson.

"I suspect most of those are privileged and would not happen, but we'll have to wait and see what kind of requests are made."