Tsvangirai likely to be sworn in as Prime Minister on Friday

Sources say Zimbabwe’s leaders are keen to have former South African President Thabo Mbeki stay on in the country for another day to attend the inauguration ceremony.

The Zanu PF leader Robert Mugabe is reported to have made major concessions to the Movement for Democratic Change in cabinet sharing negotiations. Mbeki has been facilitating discussions between the parties to try to save from collapse a power-sharing deal he brokered last month over the cabinet sharing standoff.

Its is reported that Robert Mugabe could back down on the allocation of key ministries to his ruling ZANU-PF party to save a power-sharing deal with the opposition, state media said on Thursday.

Talks resumed between Mugabe, MDC leader Morgan Tsvangirai and MDC faction leader Arthur Mutambara — mediated by former South African President Thabo Mbeki — to resolve a dispute over cabinet posts threatening an agreement signed on September 15.

The state-run Herald newspaper quoted a senior official from Mugabe’s party as saying there could be changes to a list of ministry allocations announced last week, which infuriated the opposition by giving top posts to ZANU-PF.

"I am not in a position to say what these changes will entail because the matter is now being handled largely at the highest level, that is at the level of the three party leaders," the official said.

A Western diplomat said Mugabe had agreed to the MDC controlling the finance ministry, which is crucial to reviving Zimbabwe’s ruined economy and attracting foreign investment.

"When I spoke to Tsvangirai he said that ZANU-PF had conceded the ministry of finance," the diplomat said. "What they are still going hammer and tongs at is the ministry of home office."

The opposition said on Wednesday that the parties were close to a deal on forming a cabinet.

Mugabe, who was upbeat on Wednesday on the possibility of a deal, declined comment on the chances of a breakthrough as he headed into talks.

MDC Secretary-General Tendai Biti was not so hopeful.

"Where is this optimism coming from?," he asked.

Tsvangirai threatened to pull out of the agreement on Sunday after Mugabe allocated key ministries, including defence, home affairs — which oversees the police — and finance, to his ZANU-PF party.

Mugabe’s party lost its majority for the first time since independence from Britain in 1980 after a March 29 election which the opposition says he rigged to keep power.

The parties are under pressure to reach a settlement and international donors have pledged to pump money into the once prosperous southern African nation if a democratic government is formed and economic reforms implemented.

A new government will have to tackle the world’s highest inflation rate of 231 million percent and severe food, fuel and foreign currency shortages.