President Mugabe of Zimbabwe and his bitter enemy Morgan Tsvangirai agreed a deal last night that looks likely to end the octogenarian leader’s 28-year monopoly on power in his shattered country.

The potentially historic agreement to set up a government of national unity was announced by Thabo Mbeki, the South African President, who has spent weeks seeking to resolve the crisis caused by this year’s highly contentious presidential election.

“An agreement has been reached on all items on the agenda,” he told a press conference in Harare. “All of them endorsed the document tonight. I am absolutely certain that the leadership of Zimbabwe is committed to implementing these agreements.”

He gave no details ahead of a formal signing ceremony to be attended by regional leaders in Harare on Monday.

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Western officials hesitated to declare that Zimbabwe’s long period of oppression and misrule was over. One European Union diplomat said: “The devil is in the details. We will see on Monday how the power is shared and if the opposition has more than a symbolic role.”

Peter Hain, the former Africa Minister, said: “Tsvangirai quite rightly held out as the winner of a relatively free and fair election. He has held out for power and for Mugabe to be a ceremonial president. If Mugabe has accepted that and we are in that kind of territory then it has now provided for a peaceful way out.”

Martin Rupiyah, director of African research at Cranfield University, said: “The infrastructure for state-sponsored violence is still in place.”

Mr Tsvangirai, leader of the Movement for Democratic Change (MDC), won March’s presidential election but was denied an outright victory by the Mugabe regime’s blatant vote-rigging. He withdrew just days before the June 27 run-off after a sustained campaign of violence and intimidation by the regime’s militiamen.

Mr Mbeki has spent two months seeking to establish a government of national unity, but Mr Tsvangirai and Mr Mugabe have been unable to agree who should wield executive power.

Mr Tsvangirai was willing to let Mr Mugabe remain ceremonial president, with immunity from prosecution, provided that he himself became prime minister with full executive powers.

He said that he was also willing to work with moderate members of Mr Mugabe’s Zanu-PF party.

But while Mr Mugabe was prepared to see Mr Tsvangirai become prime minister, he was not prepared to surrender power, and it remains unclear whether he has agreed to do so. The 84-year-old dictator is a master tactician who has repeatedly outwitted his younger opponent.

The two men were also unable to agree which party should control the security forces, and how long the transitional government should rule before fresh elections are held.

Western powers would withhold the aid needed to rebuild Zimbabwe’s shattered economy if Mr Mugabe did not cede real power.

The country’s official inflation rate is 11.2 million per cent. A third of its 12 million citizens have fled. Most of those who remain survive on barely a bowl of sadza – mealie-meal porridge – a day. Services such as health, education and transport have all but collapsed, Aids is rampant and Zimbabwe has the world’s lowest life expectancy.

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