Breakaway MDC faction deny Mugabe's party's claim of a power-sharing deal in Zimbabwe

Tyrant Robert Mugabe is reported to have clinched a power-sharing agreement with the leader of a breakaway faction of the opposition Movement for Democratic Change, giving him enough sway in parliament to cling onto power.

However Zimbabwe's MDC faction then denied it had signed a deal.

'No deal has been signed by us,' said Welshman Ncube, Secretary-General of the smaller opposition group led by Arthur Mutambara.

South African President Thabo Mbeki, who is mediating in the power-sharing talks, told reporters the sides had agreed a deal but he did not know if it had been signed.

After three days of intense talks to try and reach a breakthrough in the Zimbabwe crisis, former union leader Tsvangirai, who won most votes in the first  round of the presidential election at the end of March, appeared to have been cast aside and left in the political wilderness.

Robert Mugabe and opposition leader Morgan Tsvangirai arrives for talks on Tuesday

Officials in Mugabe's ZANU-PF party said the deal had been reached with MDC faction leader Arthur Mutambara, who studied at Oxford and is regarded as one of Africa's brightest scientists.

His group holds ten seats in the parliament - enough to give ZANU-PF the support it needs to form what was being described as a government of "national unity" last night.

A ZANU-PF official said:  'We, and the MDC headed by Mutambara have signed the agreement. Tsvangirai did not sign the agreement because he is basically trying to take us back, to renegotiate issues that we had already agreed on.

'We are proceeding, and President Mugabe is going to form a government of national unity including members of the opposition.'

The ZANU-PF official declined to comment on whether the new government would include officials from Tsvangirai's MDC.

He added 84-year-old Mugabe had not closed the door on more talks with Tsvangirai but the ruling party refused to be 'held hostage'.

'The president has said they have not collapsed, and that is the position.'

The key stumbling block during the talks at a Harare hotel have been how much power Mugabe was willing to cede to the opposition movement, which won a majority of parliament in the March elections.

Although Tsvangirai won the most votes in the presidential elections, he did not get enough votes to secure  an outright victory and he withdrew from a run-off in June after a vicious campaign of intimidation by Mugabe's thugs and militiamen against his supporters.

Tsvangirai has  said he could work with moderates from Mugabe's ZANU-PF party, but not with Mugabe.

ZANU-PF and powerful police and army generals of the Joint Operational Command had always insisted Mugabe must remain as president even though he has brought the country - once the breadbasket of Africa - to its knees with the world's highest inflation and dire poverty.

Tsvangirai was stony-faced as he walked briskly from the hotel to his car last night. He made no comment other than to say that mediator South African President Thabo Mbeki would make a statement.

Mbeki's spokesman Mukoni Ratshitanga said no decision had been made for a statement.

Mutambara said he would give a news conference on Wednesday.

There have been rumors that Mutambara might break ranks with Tsvangirai in return for a government post.

Earlier on Tuesday, at a ceremony marking Armed Forces Day, Mugabe praised the military and distributed medals to retired and serving military officers.

'It is a result of the alert, vigilant and patriotic manner they have conducted their day to day duties,' he said, promising more pay hikes and housing for soldiers.

Human Rights Watch accused the ruling party and its allies of involvement in the killings of at least 163 people, and the beatings and torture of more than 5,000 others since the March elections.

The group said 32 opposition supporters have been killed since the June 27 runoff, and two since ZANU-PF and the opposition signed the memorandum of understanding that paved the way for negotiations on a power-sharing government.