“Mugabe has files on everyone,” said a source close to the 81-year-old leader. “He encourages those around him to stick their hands in the till so the moment anyone gets cold feet about what he’s [Mugabe’s] doing and wants to quit — or starts thinking he’s a liability — he pulls out their file.”

The order has left ministers scrambling to divest themselves of assets such as apartments in Johannesburg, houses in Cape Town and diamond holdings in Congo.

Some properties, such as farms in Zimbabwe itself, have simply been grabbed. Others have been acquired with the aid of a differential in exchange rates that allows government and ruling party officials to buy US dollars at less than a quarter of the market rate.

However, sources of foreign exchange are drying up. The country’s main foreign exchange earners — tobacco, agriculture and tourism — have been largely wiped out by a government land grab that began five years ago and has left only about 200 of 4,500 commercial farmers operating.

With few foreign heads of state willing to be linked with a brutal dictatorship, Mugabe is rapidly running out of friends. Even his closest allies were horrified by Operation Murambatsvina (drive out the filth), which saw the demolition of at least 700,000 homes and livelihoods last summer and has resulted in mothers and babies squatting in cardboard shelters.

South Africa has refused to give a $1 billion bailout unless conditions aimed at restoring democratic government are met. China, which has provided buses, passenger planes and fighter jets in the past year, gave only $30m after it received warning telephone calls from the presidents of Nigeria and South Africa.

Some companies have been forced to make “donations” to the ruling Zanu-PF party to continue operating. Those which fail to do so are well aware of their likely fate. In the past two years seven private banks have been “specified” — closed down and their assets seized.

Mutumwa Mawere, one of Zimbabwe’s richest tycoons, had his flagship conglomerate, Shabanie Mashaba Mines, seized by presidential decree last year, along with finance and insurance companies and supermarkets.

“Mugabe is willing to downsize the whole economy just to feed the political elite, a few hundred thousand at most,” said a European diplomat. “It’s a mafia state.”

During his 25 years in power Mugabe has become extremely skilled at drawing people from all sectors into his web of patronage. Among those handed farms that had been seized were High Court judges, police chiefs, military officers and the Anglican bishop of Harare.

However, Mugabe is now running out of the means to do this. According to Zimbabwean bankers, the Central Bank has had no foreign exchange available for weeks.

Mugabe’s lieutenants are increasingly resorting to criminality in the scramble for the country’s remaining assets. Apart from extortion, many have launched get-rich-quick schemes. Residents of Harare were astonished when signs suddenly appeared all over the city earlier this month threatening fines of 1m Zimbabwe dollars for parking illegally. A government minister had apparently acquired a tow-truck and hundreds of people have since had their cars clamped.

Other forms of profiteering include buying fuel or flour at the official low price and then re-exporting it to Congo, Zambia or Mozambique, where prices are much higher. Leo Mugabe, the president’s nephew, was caught smuggling flour into neighbouring countries earlier this month.

Shortages of fuel are so severe that the top prize in the national lottery is a tank of petrol while the plummeting Zimbabwe dollar — now standing at almost 200,000 to the pound, makes spiralling school fees of Z$17m a term almost unattainable. Teachers and civil servants earn Z$3m a month.

Mugabe’s recent announcement that he will not stand for re-election when his term ends in 2008 has seen bitter jostling for position within the ruling party, with many ministers already referring to this as a transitional period.

Last month Patrick Chinamasa, the minister of justice, revealed that the government was considering changing the constitution to synchronise presidential and parliamentary elections. This could extend Mugabe’s term to 2010 or beyond.

Even if he were to step down, that would not be the end of Zimbabwe’s problems. “This is not just about Mugabe any more,” said Roy Bennett, a former white farmer and leading member of the opposition Movement for Democratic Change.

“There are many people with blood on their hands, including military and intelligence officers who know that as long as Mugabe is there, they are protected. The moment he’s gone, they start being exposed and accountable for what they have done. You are talking about an entire cabal with an interest in this continuing.”

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