Rebel members of the Philippines military attempted to stage a coup today, storming a luxury hotel in Manila and setting up a siege in the middle of the capital.

The drama began as several former soldiers marched away from the courthouse where they had been on trial over an earlier coup attempt in 2003, and took over the Peninsula Hotel in the Makati financial district of the capital.

Military police made no apparent effort to stop the plotters, and some even went with the rebels as they left the courthouse and occupied the hotel.They set up a command centre in a second-floor function room, posting armed guards on stairways from the lobby.

Joined by dozens of sympathisers from in and out of the military, the rebels forebade guests from leaving and started issuing demands for President Gloria Arroyo to resign.

"Mrs Arroyo stole the presidency from Estrada, and later manipulated the results of 2004 elections," said Brigadier General Danilo Lim, who is also suspected of involvement in another failed coup plot last year. He asked the armed forces to withdraw support for her.

The mutiny was being led by Senator Antonio Trillanes, a naval officer who was one of the leaders of the 2003 failed coup, and who was elected to the Senate this year after a campaign run from his prison cell. "One thing I can assure you is we have more than enough willpower, fighting spirit to bring this government down," said Mr Trillanes.

As the incident appeared to be turning into a hostage drama, journalists inside the hotel refused official requests from the President's spokesman to leave and, to the chagrin of the authorities, television images from inside the hotel continued to be broadcast. Reporters soaked tablecloths in water to act as facemasks, fearing that the authorities would move in with teargas.

The plotters used their mobile phones in a desperate but apparently unsuccessful attempt to whip up more support, but the only people massing outside the hotel apart from the army were a crowd of curious onlookers.

Several hours later the plotters declared themselves ready to surrender, after hundreds of soldiers and special forces – armed with warrants for the arrest of the plotters for contempt of court – moved into position around the hotel, fired a few shots, drove an armoured personnel carrier into the roped off lobby area and let off tear gas.

Two people were reported injured in the army operation, but no one was killed.

"For the safety of everyone, we’re going out . . . because we cannot live with our conscience if some of you get hurt in the crossfire," said Mr Trillanes, at an impromptu press conference as the plotters surrendered.

Asked if he had a message for Ms Arroyo, he said: "Sooner or later, the time of reckoning will come. I may not live to see it."

The military men and their civilian sympathisers, including former Vice-President Teofisto Guingona, were led in groups to waiting police buses. Several journalists were also detained.

Today's events have strong similarities to the July 2003 insurrection, when 300 junior soldiers took over the luxury Oakwood hotel and a nearby shopping centre in Makati, rigging the area with bombs and demanding Ms Arroyo’s resignation. They surrendered after the daylong uprising.

The Philippines has seen more than a dozen coup attempts since the overthrow of President Ferdinand Marcos in 1986 and residents of Manila are used to varying degrees of unrest.

Ms Arroyo took over the presidency when her predecessor, Joseph Estrada, was ousted in the second "people power" revolt in January 2001, and opponents have criticised the legitimacy of her rule ever since.

She has been fighting allegations that she rigged the 2004 elections that gave her a six-year term.

Ms Arroyo has survived at least two coup plots and three impeachment attempts, thanks to reluctant support from a jaded middle class sick of political instability, and a strong majority in the lower house.

The stock market and the peso fell slightly after earlier gains, finishing up 1.17 per cent after climbing 2.8 per cent.

"It hurts the whole country," Vivian Yuchengco, a director of the Philippine Stock Exchange, said. "People like that should be thrown in jail."

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