Ethiopia would be prepared to withdraw its troops from Somalia even if the interim government they were sent in to install 20 months ago were still not stable or functioning, the country’s prime minister has said.

Meles Zenawi told the Financial Times that Ethiopia was “not joined at the hip” with the Somali government as frustration in Addis Ababa grows over its perennial in-fighting and the financial cost of the occupation.

His comments mark a policy shift because Ethiopia had previously indicated it would stay in Somalia until the transitional federal government (TFG) was firmly established and in control.

If Ethiopia deserts it while Somalia remains lawless and violent, it could send the world’s most intractable failed state deeper into a crisis that aid agencies say has already left millions of people on the brink of a humanitarian disaster.

But while analysts in Addis Ababa say Ethiopia is closer to pulling out now than ever before, Mr Meles remains caught in a dilemma between wanting Somali leaders to take responsibility for stabilising their country, and needing to guarantee Ethiopia’s own security if they fail to do so.

Ethiopia invaded Somalia – which has not had a properly functioning central government since 1991 – with thousands of troops in the final week of 2006 to oust a group of Islamists that had taken control of the capital, Mogadishu, and which Addis Ababa believed represented a threat to its security.

But after reinstalling the interim government of President Abdullahi Yusuf in a matter of weeks, Ethiopia’s troops got bogged down as the regime struggled to establish a firm grip on power, intra-government quarrels escalated, and an insurgency led by Islamists and rival clans took hold.

Mr Meles said Ethiopia would do everything it could to help the interim government, whose power is limited to a few parts of Mogadishu, to become stronger and more effective. But he added “that is not necessarily a precondition for our withdrawal” and stressed that Ethiopia’s commitment was not open-ended.

“Our obligation towards peace in Somalia is only one aspect. There are also requirements of our own, including financial requirements,” he said. “The operation has been extremely expensive so we will have to balance the domestic pressures on the one hand and pressures in Somalia on the other and try to come up with a balanced solution.”

Ethiopia’s desire to curtail its military engagement in Somalia is driven to a large extent by its cost, which has been felt more acutely this year as the country is hit by a combination of soaring inflation and failed harvests caused by drought, which the United Nations says has left some 10m people in need of food aid.

Addis Ababa refuses to say how many troops it has in Somalia, but independent analysts estimate there are 4,000-6,000, deployed mainly to protect senior Somali officials, government buildings and critical infrastructure.

The Ethiopian government maintains that al-Shabaab, an Islamist insurgent group said by the US to be linked to al-Qaeda, has been critically weakened. But the pattern of violence suggests otherwise. Attacks on Ethiopian troops and the Somali security forces they are training have spiked in the past month and last Friday, in a striking show of force, Islamists took control of the southern port town of Kismayo.

Civilians continue to be caught in the cross-fire: more than 50 died last week as a result of indiscriminate shelling” by Ethiopian and government troops after a roadside bomb attack on their convoy, according to a UN situation report.

In total, 8,000 Somalis have been killed and 1m forced from their homes by fighting since the beginning of last year. Due to conflict, failed rains and inflation, the UN says that up to 3.5m Somalis – or nearly half the population – could need food aid later this year.

Asked where Ethiopia’s original plan to stay in Somalia for a short time had gone wrong, Mr Meles pointed the finger at the west. It has offered lukewarm political and financial support for an African Union peacekeeping force in Somalia, which has mustered barely one quarter of its envisaged 8,000 troops.

“We didn’t anticipate the international community would be happy riding the Ethiopian horse and flogging it at the same time for so long,” he said. “We had hoped and expected ... that the international community would recognise that this was a unique opportunity for the stabilisation of Somalia and capitalise on it.”

One western diplomat in Addis Ababa said Ethiopia never expected to find itself in a guerrilla war and probably overestimated its ability to “work the clan dynamics”, the web of kin-based rivalries that divides Somali society even though its people share the same language, culture and Muslim religion.

Last week Ethiopia sequestered the president and Nur Hassan Hussein, the prime minister, in Addis Ababa for talks to make them address their differences. On Tuesday the two men signed a pledge to work together anew.

“Ethiopia remains apprehensive because the TFG is not viable, it’s not functional and it’s not helping them, and the insurgency is gaining a new edge,” said Medhane Tadesse of the Center for Policy Research and Dialogue, a think-tank in Addis Ababa.