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PNG PM O'Neill says political crisis over

Tue, 20 Dec 2011 09:05 GMT

Source: reuters // Reuters

(Updates with PM O'Neill saying crisis over, fresh quotes)

PORT MORESBY, Dec 20 (Reuters) - Papua New Guinea's political deadlock appeared to be over on Tuesday with Prime Minister Peter O'Neill saying his government was in total control of the resource-rich South Pacific nation.

O'Neill declared victory in the standoff, which has seen two competing prime ministers, after the governor general declared him the legitimate head of government, and with the country's civil service, police and army backing him.

"I am glad that we found our way through this. The government has been fully installed. We are now taking charge of all the affairs in the country," O'Neill told reporters in the capital Port Moresby.

PNG has been in the grip of a crisis since last week, with O'Neill and Sir Michael Somare both claiming to be prime minister. Extra police were flown into the capital to ensure law and order.

At stake is control over PNG's resource sector revenue, led by U.S. oil giant ExxonMobil's $15.7 billion LNG project due to come on stream in 2014. Elections are due in June.

The Supreme Court last week ordered the immediate reinstatement of Somare as prime minister.

It ruled that O'Neill had taken power illegally in August while Somare, 75, was overseas for heart treatment. O'Neill, 45, refused to step down, saying parliament had elected him.

PARLIAMENT IS SUPREME, GOVERNOR GENERAL SAYS

Governor General Michael Ogio last week reinstated Somare as prime minister, but on Monday night reversed that decision, saying he had been given incorrect legal advice, and acknowledged O'Neill as rightful prime minister.

"I now recognise the O'Neill group as the legitimate government," Ogio told The National newspaper on Tuesday.

"Parliament is supreme. It alone can decide who is prime minister. It is now time for MPs to join together on the floor of parliament and let the normal democratic process takes its course."

Ogio represents Britain's Queen Elizabeth, Papua New Guinea's head of state, as is the case for a number of Commonwealth member states.

But Somare was defiant, issuing a statement saying he remained prime minister, despite O'Neill controlling an overwhelming parliamentary majority.

"My minority government does not want to see this country being led by members of parliament that use sheer numbers to hijack processes in parliament and trample all over our constitution," said Somare.

"The pattern of intimidation used at the highest level, eaves my government speechless."

For many Papua New Guineans, the crisis is a contest between the old political guard of Somare -- known as "The Chief" who led the country to independence -- and O'Neill's administration, which is seen offering a fresh, more open alternative.

Corruption is endemic in PNG. Transparency International ranks it 154th out of 182 on its global corruption index. PNG is a nation struggling to unify more than 800 language groups and is often plunged into bloody tribal clashes.

Despite its wealth of resources, the majority of PNG's seven million people eke out subsistence livings in mountain villages. (Reporting by Michael Perry; Editing by Ron Popeski)