“We’ve got a deal,” Morgan Tsvangirai told journalists waiting in the lobby of the Rainbow Towers hotel in Harare. It was the first news the world had that he and President Mugabe had at long last thrashed out a power-sharing agreement.

If they really have, and if it sticks, it will mean an extraordinary alliance between Robert Mugabe and those who until yesterday were his bitterest foes – people who have been spied on, beaten up and arrested and seen friends and family killed by his thugs.

The on-again, off-again talks between Mr Tsvangirai and the man known to his people as “the Old Crocodile” began on July 21 and had seemed to be meandering towards failure. On Monday they were shrouded in gloom and pessimism. Despite some optimistic noises from both parties on Wednesday, The Herald – the state-run paper and propaganda organ for the ruling regime – was repeating accusations that Mr Tsvangirai was taking orders from the West and seeking to “reduce President Mugabe to a ceremonial leader. That is obnoxious to the establishment here.”

As the weeks passed, the derision of President Mbeki’s “quiet diplomacy” and mediation turned to a weary scorn. Frustrated by the lack of progress, the EU was preparing to add more names to its list of figures subject to a visa ban and whose assets had been frozen.

And yet on Wednesday Mr Mugabe was sounding upbeat. In a throwaway remark – of which, with hindsight, the world should have taken more notice – he told reporters: “I am optimistic. We are not born to be pessimistic, are we?”

Mr Mbeki, the South African President, certainly sounded positive as he presented the agreement last night, although he urged the international community to wait and scrutinise the details – and not rely on what they thought should be in it. “It’s made in Zimbabwe, it’s made by Zimbabweans,” he said. “The rest of the world needs to respect that the people of Zimbabwe have taken a decision about their own country.”

Peter Hain, Britain’s former Africa Minister, sounded a note of caution, describing President Mugabe as a “slippery customer”. Mr Hain recalled how followers of Joshua Nkomo, a former opposition leader, were killed despite Mr Nkomo reaching an agreement with Mr Mugabe, his former comrade in the struggle that ended with Zimbabwean independence in 1980.

“He [Mr Mugabe] effectively swallowed his party up and killed a lot of his followers and obviously we don’t want to see a repeat of that, but I don’t think Tsvangirai would have agreed to anything that could see an action replay of what happed to Nkomo.

“I think that because Tsvangirai won the presidential election, and because all the African leaders, however muted their criticisms may have been of Mugabe, know that this crisis, which Mugabe has created on his own, is not sustainable.”

A Brussels-based diplomat who asked not to be named said: “We will see. The devil is in the details. It is a bit too early to react. We will see at the Council of EU Foreign Ministers [which meets on Monday].”

If the deal does stick, the new government will face an overflowing in-tray. Zimbabwe has gone in a few years from being the economic pride of Africa to its utter basketcase. One of its leading banks, Kingdom Bank, has said that the inflation rate was more than 20 million per cent. Recently the Government had to knock 13 zeros off the currency because banks and bank machines simply could not cope with the mathematics.

In downtown Harare yesterday the banks were jammed with people hoping to cash cheques or trying to move their money by electronic transfer. Outside, hundreds of people queued at ATMs. The resentment of customers was intensified by the realisation that by the time they got their money, it would be worth less than when they started to queue.

Times Recommends

• Both sides blame US for worsening relations
• Stieg Larsson: losing the plot over his cash
• Odd creature paralysed by incompatible parts