ADDIS ABABA (Reuters) - A lack of funds has forced the U.N. World Food Programme (WFP) to cut by more than half the number of districts in drought-hit Ethiopia it serves, the food agency said on Monday and appealed for $76.4 million in aid.

WFP said shortages would prevent it from providing food supplements to malnourished mothers and children.

"Due to a funding shortfall, WFP has less food in its warehouses and as of the end of last month, it was forced to cut back food assistance operations ... from 342 districts to 163 districts," WFP said in a statement.

"Despite evidence of malnourishment in some drought-affected areas, a food deficit will prevent the agency from providing nutritious, life-saving food supplements to acutely malnourished children and mothers."

WFP said it needed $76.4 million to feed mothers and children under five and to support the government's emergency relief programme.

WFP said that in 2007 it provided supplementary food to over 1.1 million Ethiopians.

A U.S.-based early warning system, FEWSNET, had said that up to nine million Ethiopians may need food assistance due to drought in 2008.