Regional summit disappoints Zimbabwe's MDC

PRETORIA (Reuters) - Regional leaders decided at a summit on Tuesday that Zimbabwe should form a unity government next month but the opposition said it was disappointed with the outcome, raising doubts over chances for ending the crisis.

Mugabe's government, which has made clear it would set up a government without the opposition if need be, said talks were concluded and a new cabinet could now be formed.

The 15-nation SADC grouping said after the meeting in South Africa -- its fifth attempt to secure a deal on forming a unity government -- it had agreed that opposition MDC leader Morgan Tsvangirai should be sworn in as prime minister by February 11.

"We hope this will open up a new chapter in our political relations in the country and in structures of government," said Mugabe after returning home from the summit. But there was no end to the uncertainty for Zimbabweans struggling to survive in a country with the world's highest inflation rate and shortages of food, fuel and foreign currency.

If Mugabe forms a government without the MDC, as he has threatened to, the opposition's majority in parliament could prevent him from passing a budget and key legislation, creating political paralysis.

South African President Kgalema Motlanthe said after the summit that all sides agreed that control of the Home Affairs Ministry, a major obstacle, should be divided between President Robert Mugabe's ZANU-PF and Tsvangirai's MDC for six months.

But the MDC quickly issued a statement after the SADC (Southern African Development Community) communique, making clear its disappointment and raising the possibility that deadlock would drag on.

Zimbabwe's Deputy Information Minister Bright Matonga said talks were done and Mugabe could now form a cabinet, warning the opposition against trying to "hold Zimbabwe to ransom."

SLIM HOPE

An analyst said chances for a deal appeared slim.

"Prospects for agreement do not look good, especially because SADC has, once again, come out in support of Mugabe and maintaining pressure on the MDC," said Zimbabwean political analyst John Makumbe.

"If the MDC insists there is no deal, then SADC would have failed and the next step would be to take the matter to the African Union."

The MDC said its national council would meet this weekend to define its position on the summit.

The signing of the power-sharing deal in September was seen as a chance to prevent a total economic collapse that would add to the strain on neighbours already hosting millions of Zimbabweans who fled in search of work.

Others are escaping a cholera epidemic that has killed nearly 3,000 people and infected more than 56,000 since August -- Africa's worst outbreak of the disease in 12 years, according to World Health Organisation data.

Aid agency Oxfam said health risks posed by cholera could hurt future generations by disrupting a return to schools.

"It is a tragedy that children and their families are facing this impossible choice: risk their lives or compromise their futures. Education is just one of many casualties of the political and humanitarian crisis in the country," said Peter Mutoredzanwa, Oxfam's country director in Zimbabwe.

"This crisis cannot be allowed to steal children's futures."

SADC said ministers would be sworn in on February 13, which would conclude the process to form an unity government. Allocation of ministries would be reviewed six months after the inauguration of the government, it added.

Western leaders want Mugabe, in power since 1980, to step down and a democratic government to embrace economic reforms before billions of dollars in aid is offered to ease the desperate crisis.

The recently introduced 10 trillion Zimbabwean dollar note cannot buy a loaf of bread, which costs Z$30 trillion. Two weeks ago, a loaf of bread cost Z$30 billion.

Tsvangirai won most votes in the first round of last year's presidential election, but not enough to avoid a second round. He pulled out of the run-off, citing attacks on his supporters, and Mugabe was re-elected unopposed.

(Additional reporting by Laura MacInnis in Geneva; Writing by Marius Bosch and Michael Georgy)