Zimbabwe signs deal with Britain to end occupation of white-owned farms

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Zimbabwe agreed last night to end the occupation of all white-owned farms and the violent intimidation of President Robert Mugabe's political opponents in exchange for £36m from Britain to help to finance a new programme of land reform.

In what appeared to be a remarkable breakthrough, Stan Mudenge, Zimbabwe's Foreign Minister, signed a declaration drafted by Commonwealth ministers, setting out the conditions his country must observe to gain the organisation's financial backing for an orderly transfer of designated white farms to landless black peasants. Sule Lamido, the Nigerian Foreign Minister, who had earlier warned that Zimbabwe was on the brink of a "racial war", announced the deal, saying: "There is a total breakthrough."

Jack Straw, the Foreign Secretary, who represented Britain at the talks in the Nigerian capital, Abuja, welcomed the breakthrough but said: "The test of this agreement will be the events on the ground." Injecting a strong note of caution, one senior diplomat said: "The Zimbabwe delegation in Abuja was not led by Robert Mugabe."

The agreement revives a plan mooted by the United Nations in the late 1990s. Britain and other international donors will finance compensation for white landowners and the fund will be administered by the UN Development Programme. Zimbabwe has agreed in exchange to "take firm action against intimidation and violence", a reference to months of terror visited not only on farmers, but on the political opposition, the media and the judiciary.

It agreed "there will be no further occupation of farmlands"; to "restore the rule of law to the process of land reform"; and a "commitment to the freedom of expression".

President Mugabe previously rejected the UN-brokered plan. His acceptance of it now, if borne out by events, comes amid mounting international pressure.