24 die as ex-Sandinistas take up arms: Disgruntled former soldiers accuse Nicaraguan President of betraying promises to them

NICARAGUA yesterday experienced its fiercest fighting since the end of the Contra guerrilla war in 1990 as government forces fought street battles before forcing 150 guerrillas from the town of Esteli. Ironically, the rebels were said not to be from the Contras or their post-war remnants, the so-called Re-Contras, but disgruntled former Sandinista soldiers critical of President Violeta Chamorro.

Hospital sources contacted by telephone spoke of up to 24 dead and more than 50 wounded after the rebels, accusing Mrs Chamorro of failing to live up to her promise to rehabilitate them into civilian life, attacked the town of more than 100,000 people, about 90 miles north of Managua, on Wednesday afternoon. They say Mrs Chamorro has not yet granted them promised credits to allow them to cultivate land. The President had previously said the country's economic crisis was preventing her from providing discharged soldiers with the promised credits or plots of land.

The army, still basically the same Sandinista force whose political leader, Daniel Ortega, was defeated by Mrs Chamorro in 1990 elections, yesterday sent tanks and helicopter gunships to Esteli and fought the rebels street by street in a bizarre re-run of the Contra war, this time against their former Sandinista companeros. According to one report, some ex- Contras, from the ranks of those backed by the US during the guerrilla war throughout the Eighties, may have been part of the ex-Sandinista rebel force, calling itself the Workers' and Peasants' Revolutionary Front.

The rebels, who beat a retreat to the hills, had demanded an amnesty yesterday. Mr Ortega's brother, General Humberto Ortega, retained control of the army after Mrs Chamorro's election in 1990. The new President proposed an amnesty plan for former Contras.

Nicaragua's ambassador to Honduras, Noel Rivas, his wife and chauffeur, were said to have been kidnapped by the rebels. They had apparently been passing through Esteli, since the town straddles the Pan-American highway that runs through Central America. Daniel Ortega's Sandinista National Liberation Front, which overthrew the dictator Anastasio Somoza in 1979 and ruled until defeated by Mrs Chamorro's conservatives at the polls, denounced the rebel action as 'vandalistic'.