Kenya’s political rivals agreed a power-sharing deal yesterday, after more than a month of negotiations to end tribal violence.

Raila Odinga, the opposition leader, will take up a new post of prime minister with authority to oversee the work of government, after President Kibaki bent to demands to give up some of his power.

The deal, brokered by Kofi Annan, eases tensions in a country once regarded as a haven of stability. But analysts said it would take much longer to mend the ethnic faultlines exposed by the December elections.

Mr Annan looked relieved as he announced the terms of the deal at a signing ceremony in central Nairobi. Earlier this week the former UN Secretary-General suspended talks between the two teams of negotiators in order to appeal directly to their leaders. “We believe by these steps we come together in the spirit of partnership to bring peace and prosperity to the people of Kenya who so richly deserve it,” he said, as he announced the creation of a prime minister and two deputies.

The agreement also spells out that ministers in the coalition government will reflect the strength of parties in Parliament. Mr Annan added that work would start today on finding long-term solutions to social and ethnic division.

International leaders, some of whom had threatend sanctions if agreement could not be reached, sent congratulations. Gordon Brown said: “Common sense has prevailed, and the Kenyan people have the outcome for which they have hoped and prayed.”

More than 1,000 people have died since Mr Kibaki was sworn in for a second term. Election observers said that widespread rigging meant they could not be sure of the result and few governments sent congratulations to Mr Kibaki. Opposition supporters targeted members of the President’s Kikuyu tribe in a wave of ethnic bloodshed.

Office workers outside the government buildings where the deal was signed erupted in cheers as Mr Odinga stepped forward to speak. He thanked Mr Annan for his efforts during Kenya’s troubles. “A crisis also offers an opportunity and I think this crisis has taught Kenyans a serious lesson that will help form a firm foundation for a united country,” said the man who will become prime minister.

It is a job that he was promised once before by Mr Kibaki, who later reneged on a commitment to change the country’s constitution.

Paul Waweru, 56, who is living in an aid camp in the town of Eldoret, said: “The deal between Raila and Kibaki will help to cool down the situation but I doubt if it will enable us to get back to our homes.”

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