Morgan Tsvangirai today said he was optimistic that a power-sharing agreement would be secured to end Zimbabwe's political crisis, as he arrived to restart talks with President Mugabe.

The make-or-break negotiations were suspended after a marathon 14-hour session in the early hours of Monday morning, but the head of the opposition Movement for Democratic Change said he had “hope” that they would now reach a conclusion.

Earlier Mr Mugabe, who has governed the country since its independence from Britain in 1980, said that only “little hurdles” remained to an agreement in the talks, mediated at a Harare hotel by South African President Thabo Mbeki.

Mediators hope that an agreement will bring an end to months of violence and instability triggered by a disputed presidential election in March, which both parties claim they won.

Despite the optimism some opposition sources sounded a note of caution, saying that a power-sharing agreement was being held up by Mr Mugabe’s refusal to give up executive powers. Control of the country’s powerful security forces is also said to be a sticking point.

A source close to the talks said Mr Mugabe’s ruling Zanu-PF party is demanding that Arthur Mutambara, leader of a breakaway MDC faction, be given a position as a deputy prime minister - in an apparent effort to deepen the opposition split.

“The major hold-up is the refusal by Mugabe to cede his executive powers. He is only agreeing to a nominal prime minister post for Morgan Tsvangirai,” the source said.

“They are also insisting that Mutambara becomes one of the deputy prime ministers. Obviously that is not acceptable to us.”

Negotiations began last month after Mr Mugabe’s unopposed re-election in June in a second round presidential poll was condemned throughout the world and boycotted by Mr Tsvangirai because of attacks on his supporters.

The MDC said that 120 supporters, including party officials and their families, were killed by Mr Mugabe’s militias in a brutal campaign ahead of the run-off vote. Thousands of others suffered torture and rape.

Speaking after the last session of talks, Mr Mbeki’s spokesman, Mukoni Ratshitanga, said the South African leader was returning home on Monday. But he declined to say whether a deal was imminent or whether the talks could fail.

Both sides are under international pressure for a deal, particularly from neighbouring countries that fear the consequences of a total meltdown in Zimbabwe. Millions of Zimbabweans have already fled the country in the midst of an economic collapse that has seen widespread famine and inflation soaring past 2 million per cent, according to official July figures.

But today, Mr Mugabe hit out at sanctions newly imposed by the US and Europe, saying that these “effectively undermine the rapprochement which should otherwise be cemented through the inter-party dialogue”.

With characteristic defiance, the former liberation fighter said Zimbabwe “was not for sale” and “will never be a colony again”.

“Let’s not hand over the country to the enemy,” the 84-year-old leader said at an event in Harare to commemorate the veterans of the country’s independence war. “If you are on the enemy’s side or you are being used by enemies, stop it."

Mr Mugabe, who has often sought to portray Mr Tsvangirai as a stooge of Britain, the country’s former colonial power, also declared that “we will die for our legacy".

“Fighting in self-defence is not a sin,” he added.

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