Milosevic concedes defeat

The unbelievable became real in Belgrade last night when Slobodan Milosevic, who had always seemed certain to fight to the death to keep his hold on power, congratulated and shook the hand of Vojislav Kostunica, the democratically elected president of Yugoslavia

The unbelievable became real in Belgrade last night when Slobodan Milosevic, who had always seemed certain to fight to the death to keep his hold on power, congratulated and shook the hand of Vojislav Kostunica, the democratically elected president of Yugoslavia

The two men discussed the transfer of power in an hour-long meeting, the independent Belgrade Beta news agency reported. Until Thursday evening, the Milosevic regime had absolutely refused to acknowledge Mr Kostunica's victory in the presidential elections two weeks ago.

Shortly after the news broke, Mr Milosevic himself appeared on television to congratulate his rival and concede defeat. He told the Yugoslavian people that he planned to rest, spend some time with his family, and then return to political life as leader of the Socialist Party. Whether the Socialists would be pleased to have him back was unclear, however. Immediately he had spoken, Belgrade erupted in a deafening cacophony of celebration, as car drivers sounded their horns in the streets and huge crowds chanted, blew whistles and let off fireworks.

In another meeting with Mr Kostunica, Mr Milosevic's military chief, General Nebojsa Pavkovic, told him that the armed forces had accepted the will of the people and that they would not stand in the way of democratic change.

During the afternoon, a visibly exhausted Mr Milosevic had appeared on television for the first time since being swept from power and attempted to stake a claim to a political future in his ravaged country. With the threat of a war-crimes prosecution hanging over him, the former president insisted that he wanted to retain a political role.

Meanwhile, Mr Kostunica, fêted by world leaders, consolidated his grip on power. His victory was officially recognised and blessed by the Orthodox Church and he prepared to be formally sworn in on Monday.

Reality finally caught up with Mr Milosevic yesterday morning, when he was deserted by the ally which had stood by him through his darkest years. The Russian Foreign Minister, Igor Ivanov, visited him in his Belgrade villa - but not before he had called on Mr Kostunica in the president'soffice to convey President Vladimir Putin's congratulations. "We are gradually getting back to normal and I believe the crisis is behind us," Mr Kostunica said.

The visit came as huge crowds gathered in the centre of Belgrade to celebrate the end of Mr Milosevic's power. There was a carnival atmosphere in the capital throughout the day.

The Yugoslav constitutional court, which had initially backed Mr Milosevic by suggesting that the election of 24 September should be annulled, suddenly came round to the idea that (in the words of a popular opposition slogan) one plus one equals two. It ruled that Mr Kostunica was indeed the outright victor in the first round of the election; it also declared that there had been "irregularities" in the voting in Kosovo.

There were isolated incidents of violence - in thesouthern town of Leskovac, opposition supporters attacked the house of a local Socialist Party leader. Overall, however, the handover of power began much more smoothly than most had thought possible.

In Brussels, the European Union said that it was preparing measures to help to smooth Serbia's passage back into the international community. The EU is ready to lift two of its main economic sanctions against Yugoslavia, and could funnel as much as 2.3bn euros (£1.4bn) in aid to Serbia between now and the end of 2006.

On Monday, the EU oil embargo is expected to be lifted, as is a flight ban. However, these gestures were said to be conditional on Mr Kostunica authorising the handover of Mr Milosevic to the International War Crimes Tribunal at The Hague.

Meanwhile, Mr Kostunica formed a crisis committee to govern the country and secure public order. The speaker of the Yugoslav parliament, until yesterday regarded as a staunch Milosevic ally, announced that the chamber would be convened on Monday formally to install Mr Kostunica. The letter telling Mr Kostunica of this was addressed to "The President of the Federal Republic of Yugoslavia".