The fall-out in ANC leads to a split as former Chairman forms new party

The officials, loyal to Thabo Mbeki who was forced to resign as South African president last month by the executive of the African National Congress, was due to make a statement at 0800 GMT, said Talk Radio 702.

Mbeki’s resignation at the climax of a power struggle with ANC leader Jacob Zuma marked the biggest political upheaval in the history of the party.

The creation of a breakaway party would add to political uncertainty and unsettle investors in Africa’s biggest economy, but traders said it was hard to gauge the impact on the rand because it has tumbled already amid global market turmoil.

Although any political shakeup is cause for concern among foreign investors, their attention is focused mainly on any signs that the ANC will shift away from pro-business policies.

Speculation has been growing about a possible split in the ruling party despite efforts by new President Kgalema Motlanthe and other ANC leaders to dismiss such talk.

Any new party could be hard pressed to win voters and funding before an election due in April, in a country where the ANC has dominated political life since the end of apartheid in 1994.

"The ANC still has a monopoly on the traditions of the heroes of the liberation struggle, and it will be very difficult for a small group of leaders to be able to present themselves as the genuine ANC, which is what they’d have to try and do," said political analyst Nic Borain.

Zuma has said Mbeki would be asked to help campaign at next year’s election, in an apparent attempt at reconciliation.

Zuma, widely expected to become president after the general election, was quoted as telling a meeting of black businessmen on Tuesday that any breakaway party would have no alternative policies to offer and could not last.

"You can’t believe in the ANC and its policies so deeply, and then form an organisation that repeats the same policies, that would be funny," SAPA news agency quoted him as saying.

"If it happens it could be the anger and die down very quickly. When people are shocked, angry, quickly reacting, you could say ‘I’d better go away’."

The party deposed Mbeki over allegations of political interference in a corruption case involving Zuma.

Lekota, who resigned as defence minister after Mbeki’s removal, has accused the ANC of stifling dissent and flouting the rule of law. Reuters