President Robert Mugabe is holding out against losing control of the police to prime-minister designate Morgan Tsvangirai.  Peta Thornycroft reports for VOA that power-sharing negotiations have reached such a critical stage there are fears the agreement signed three weeks ago will become null and void.

Zimbabwean President Robert Mugabe (File)

According to a long-standing legislative watchdog, Veritas, the constitution allows the president, who will continue to be Robert Mugabe in the new government, to appoint the top policeman - the commissioner general.

The present commissioner general Augustine Chihuri, along with all other service chiefs, has said he will not serve under nor salute prime minister-designate Tsvangirai.

Mr. Tsvangirai says he needs to run the home affairs ministry in a new power sharing government.  He has already agreed to Mr. Mugabe having control of the army and the central-intelligence organization.

Mr. Tsvangirai's Movement for Democratic Change won a narrow parliamentary majority in March 29 elections.  Mr. Mugabe's government declared he was the winner of the disputed second round presidential vote.

Veritas also noted that the central-bank governorship is also under control of the president.

The term of bank governor Gideon Gono ends this year.  He is accused by the MDC and many businessmen of causing  massive inflation by printing money.  The U.S.-based Cato Institute estimates present inflation is at more than 500 billion percent, a world record.

Gono has canceled electronic money transfers between banks and between banks and account holders.

Human-rights organizations say Zimbabweans are suffering  because of restrictions on withdrawing their own money from banks.  People are not allowed to withdraw enough from their own accounts to buy a single meal, or even a loaf of bread.

Veritas says under Zimbabwe law the central-bank governor is obliged to consult the minister of finance, but does not have to follow any advice.

In recent years, Veritas says, the central bank has taken over many traditional functions and responsibilities of the finance ministry, which has allowed the government to bypass constitutional requirements for legislative control of public money.

Western donors have made it clear that no rescue package will come Zimbabwe's way unless there is a new independent central-bank governor and the institution reverts to its traditional role.

Negotiations for the cabinet will continue this week, but some analysts predict there could be such a serious deadlock that the power sharing agreement will fail unless Mr. Mugabe relents on the police portfolio.