Zimbabwe's official state-run newspaper admitted for the first time today that Robert Mugabe has not won the presidential election, in a front-page story which has been printed and distributed around Zimbabwe and cannot be withdrawn.

Parliamentary results are now largely in and Mr Mugabe's Zanu-PF, which has dominated it for so long, has lost control to the opposition Movement for Democratic Change, which once had only a handful of MPs.

These are pretty significant developments on the Zimbabwean political scene.

There remains dispute and confusion about what Mr Mugabe and Zanu-PF will do next. They obviously know what the results of the presidential ballot are. Does he go for a re-run in the presidential ballot and try to cheat his way to victory in the second round? Or does he preserve his political legacy better by negotiating a deal to stand down, while a handful of Zanu-PF figures continue to serve in a power-sharing government?

Mr Mugabe is an extremely proud man and sees these election results as a defeat, a rejection by his ungrateful people of his freedom fighting and his wonderful achievements.

He knows, or at least those close to him know, that on a level playing field he would be humiliated in a run-off. Given the renewed vigour and watchfulness of the MDC, it's unlikely that he could steal a victory in a run-off unless things get incredibly nasty.

It was interesting to hear the report that the one person standing in the way of his resigning now was the army chief of staff. That makes sense. These people are frightened of his losing power, and are probably the last remaining people who believe they can swing it his way.

The army bosses once said they would never report to Morgan Tsvangirai, the opposition leader, and now stand to lose out completely. They are diehards, urging a run-off which they would do their utmost to make sure they win – a frightening and dangerous prospect.

On the hand, the politicos closer to Mr Mugabe appear to realise his era is over and hence the Herald newspaper headline today. “Winning is no longer an option,” said a regional diplomatic source, close to the negotiations on a peaceful way out for the veteran leader. “Even if he swung it his way, no one at home or abroad would believe a word of it and the discredited regime would face sanctions and no future.”

We already knew there were divisions at the centre of Zanu-PF, because of the emergence of the former finance minister Simba Makoni as a rival to Mr Mugabe. These huge rifts are now being exacerbated, and they are in a quandary whether to opt for a run-off or to do a deal with the MDC. Now the game is up, but how the end is played out is still going to be problematical.

Many analysts believe Mr Mugabe would much rather go now than face humiliation in a run-off, but delivering that message and easing out of the president’s chair is another matter altogether.

The situation is further complicated because the MDC itself is also divided. Many in the MDC see the importance of doing a deal because they are frightened of violence. Mr Tsvangirai may call himself the undoubted winner but even he realises he must give Mr Mugabe some kind of immunity or protection, or he won't go.

But there are others in the MDC who reject any idea of doing a deal for a smooth handover of power that would see Zanu-PF figures serving in their Government. “We have waited years, what is a bit longer?” said one of his supporters yesterday.

Against this backdrop there is a lot of diplomatic activity. President Thabo Mbeki of South Africa, is said to be the lead player in a lot of the talks that are taking place.

The South Africans are the only people with any real influence that Mr Mugabe will listen to. He will probably be telling Mr Mugabe that it is for the good of his country and his people and his own political legacy that he must now step down, while securing some kind of recognition of the importance of Zanu-PF and its role in delivering Zimbabwe from the colonial oppressors so that no-one can say it has been humiliated or has lost.

Today's report in the Herald has now set the context for the talks. Mr Mugabe has not won. The MDC has done very well in parliament. These are significant concessions, which were probably wrung out of Mr Mugabe. The fact that they have had to go public and admit that he has not won is itself a big step forward.

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