Outback 'duke' takes on the bank: A Queensland man has defied Australia by creating a principality to escape his debts, writes Robert Milliken

THE Queen's newest realm, the Principality of Marlborough in outback Queensland, was preparing yesterday to resist an attempt by police to end its secession from the rest of Australia.

The principality comprises a 20,000 acre cattle and grain farm whose owners, George and Stephanie Muirhead, both 43, declared it an independent country a week ago in a bizarre act of constitutional defiance whose echoes have already reached Buckingham Palace and the United Nations.

Like thousands of other Australian farmers, the Muirheads were swamped by financial crisis in the recession as they watched world prices for their beef, wheat and oilseeds plummet and interest rates on their bank borrowing soar. Two months ago, their bank won a court order to put receivers into their property near the town of Marlborough, 375 miles north-west of Brisbane.

Accompanied by more than 40 farmers and their families from all over the outback, the Muirheads and their two children on Friday marched along dusty roads, through the property's front gate and into their former homestead where they told the receiver's manager to leave peacefully because they were taking over again. He complied.

The Muirheads carried a 100-page 'secession document' prepared by lawyers, copies of which they have sent to the Queen, the Governor-General and her other representatives in Australia's six states and the United Nations. Mr Muirhead proclaimed himself the Duke of Marlborough and presided over a ceremony in which four flags were raised: those of Australia; the UN; the Aborigines; and Scotland, representing his forebears five generations ago.

The carefully planned secession was the most extreme manifestation so far of a form of right-wing populism spreading among frustrated and despairing Australian farmers. Many have joined self-styled 'rural action' movements, whose amorphous mixture of attacks on banks, established farming lobby groups, governments and the International Monetary Fund is borrowed from similar groups in the United States. The message the Australian groups preach to farmers is deceptively simplistic: if banks create your credit, they can equally forget your debt.

Mr Muirhead appeared to have taken this to heart yesterday, when he declared: 'We've seceded because we couldn't get justice out of the Australian legal system. It has a mechanism guaranteeing that the guy with the biggest cheque book wins.' Only if Canberra called a Royal Commission into the judicial and banking systems would he renounce his independence.

The Muirheads and their supporters were still in possession last night, but their bank is expected to seek a new court order today for police to move in. As the rest of Australia moves towards a republic, it seems an irony that the pocket principality has retained as head of state the Queen, who theoretically presides over the system which brought the Muirheads to grief.

John Muirhead, 23, their nephew, explained: 'If Australia can't cope with our declaration, then Australia is lost.'

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