Leaders battle to guide rump Serbian state

AS the international sanctions net closes ever tighter around Serbia, a bitter power struggle is under way in Belgrade over who will guide the destiny of this isolated pariah state.

Speculation is rife in the local media that Slobodan Milosevic, the President of Serbia, may resign at the end of the year. The principal challenger to the great architect of Serbia's wars of conquest and its subsequent international isolation is Milan Panic, a Serbian businessman who recently returned to Belgrade after 30 years in the United States to become Prime Minister of Yugoslavia - now consisting only of Serbia and its small neighbour, Montenegro. Initially written off as a puppet of Mr Milosevic, imported from the US to polish up Serbia's abysmal foreign image, Mr Panic has since come out with a stream of pledges and statements that appear to undermine the Serbian strongman.

First, Mr Panic said: 'God help Milosevic if he gets in my way' - a peculiar way to refer to a political patron. Later, on a visit to Albania, he pledged to lift the state of emergency in Serbia's strife-torn ethnic-Albanian province of Kosovo.

Most recently, and most shockingly in the eyes of Belgrade officialdom, Mr Panic promised that Yugoslavia would recognise Bosnia and Croatia within their existing frontiers.

Some Western diplomats earlier decided he was just plain wacky. Most now accept that a little light-hearted jostling for power in Belgrade has escalated into an outright contest for control over the future direction of Serbia.

In the Serbian capital, the new Prime Minister's off-the-cuff remarks caused astonishment, verging on apoplexy. For Mr Milosevic, the recognition of Bosnia and Croatia in their existing frontiers is complete anathema. It flies in the face of savage, merciless warfare for the creation of a greater Serbian state sprawling over most of Bosnia and one-third of Croatia. It means that the siege and razing to the ground of the city of Vukovar in eastern Croatia by the Yugoslav army last year was a waste of time and lives, even from Serbia's point of view.

No less abhorrent to Mr Milosevic was the Prime Minister's pledge to ease the repression of Kosovo's 2 million Albanians. The humiliation of this minority was the tool by which Mr Milosevic rose to power in Serbia in 1987, on a wave of nationalist fervour and intolerance.

'Everything that Panic says is the opposite of what Milosevic says or believes,' said Milos Vasic, a journalist on the liberal magazine, Vreme.

'It is impossible to avoid a clash much longer,' confided another Serbian journalist on a Belgrade newspaper. 'Panic was brought in to improve the image of the regime. Milosevic counted on him as a nationalist and wanted to manipulate him, forgetting that after 30 years in America Panic had changed his philosophy. Panic has realised the world will never accept what Milosevic is doing.'

Mr Milosevic has not yet used his tightly controlled media machine to destroy his rebellious creation. Amid international outrage over Serbian atrocities in detention camps in Bosnia, he is lying low. In the meantime, Mr Panic's inconvenient statements are being ignored or politely laughed out of court. As one Serbian official in Kosovo acidly commented: 'There is no state of emergency in Kosovo to lift.'

This stand-off cannot last. A likely date for joining battle will be at next week's London conference on the future of the former Yugoslav republics, when the incompatible views on war, the rights of minorities and frontiers held by Mr Panic and Mr Milosevic will inevitably come to the fore.

A battle for the destiny of Serbia will bring in two other vital players: the elderly President of Yugoslavia, Dobrica Cosic, and General Zivota Panic, the head of the Yugoslav army. Insiders say that Mr Panic enjoys good relations with his namesake in the army. Mr Cosic, a nationalist intellectual, is likely to side with Mr Milosevic. Mr Cosic is widely seen as the mentor of the Serbian president.

Mr Panic has little real power. Bold claims - he once boasted, 'I can make a general get up or sit down if I want to' - have yet to be tested. His only weapons are a certain freshness and the hope he gives many Serbs that their country can still be rescued from a downward spiral of war and growing isolation.

He himself said he wanted only 100 days to end the fighting in the former Yugoslavia and lift world sanctions against Serbia. Halfway through his 100 days, neither goal is in sight.