Mbeki Fires Deputy in Corruption Scandal

South Africa's deputy president, Jacob Zuma, who was tipped to become the next leader of Africa's economic powerhouse, was dismissed yesterday after being implicated in a corruption scandal.

Mr Zuma's fall from grace will trigger a struggle to succeed the president, Thabo Mbeki, and threatens to open a rift in the ANC.

The deputy president has not been charged or convicted of any crime but his reputation was tarnished after his friend and financial adviser, Schabir Shaik, was found guilty of corruption and fraud.

In a damning judgment, Judge Hillary Squires found "not only convincing but overwhelming", evidence of a corrupt relationship between Shaik and Mr Zuma, 63.

In a speech to the parliament in Cape Town, Mr Mbeki said the judge's ruling required him to act. He said: "I have come to the conclusion that the circumstances dictate that in the interest of the honourable deputy president, the government, our young democratic system and our country, it would be best to release the honorable Jacob Zuma from his responsibilities as deputy president of the republic and member of the cabinet."

As corruption in Africa comes under the spotlight before the G8 summit, the president had to act quickly to reassure investors.

Tony Leon, the leader of the main opposition Democratic Alliance, said: "We have shown the world that South Africa is not among those nations who allow corruption to unravel the fabric of their country's soul."

But Mr Zuma still has support among the ANC's rank and file. Supporters want him to have his day in court, while some suspect the white judge's motivation.

Mr Zuma, who remains the ANC's deputy president, said yesterday that freedom and democracy were "more important than us as individuals".

The high court in Durban found Shaik paid Mr Zuma in return for government con tracts and solicited a bribe from French arms firm Thint Holdings to pay Mr Zuma. In return, he was meant to deflect inquiries about a 1999 arms sale. The national prosecuting authority said it was considering a further investigation.

The court found Shaik paid 1.2m rand (£97,000) to Mr Zuma to fund a lavish lifestyle. Testimony showed he was always short of money and relied on Shaik to build a luxurious house and pay school fees.

"Instead of just stabilising the situation and managing Zuma's chaotic finances so debts could be paid off, Shaik made it possible for Zuma to continue living beyond his means without anyone knowing the quid pro quo [Shaik] would ask for," Judge Squires said. "No sane or rational businessman would conduct his business on such a basis without expecting some benefit."

Mr Mbeki, who has pledged to stamp out corruption, said yesterday he continued to hold Mr Zuma in "high regard".

"We have worked together under difficult conditions for 30 years," the president said.

He thanked him for services rendered and "sparing neither strength nor effort" to ensure "a better life for all South Africans".

Mr Mbeki is required under South African law to step down at the end of his second presidential term in 2009 and Mr Zuma had been widely expected to succeed him. The president did not immediately announce a replacement.

The ANC's national chairman and defence minister, Mosiuoa Lekota, is the most likely successor. Another candidate is the foreign minister, Nkosazana Dlamini-Zuma, Mr Zuma's former wife.

Mr Zuma, a Zulu, mediated between the ANC and the Zulu-dominated Inkatha Freedom party in the early 1990s to head off a potential civil war. He joined the ANC's military wing in the 60s and rose through the ranks. He was imprisoned for 10 years on Robben Island and spent many more years in exile. It was there that he befriended Shaik who was known as the "ANC's banker."