Harare - Zimbabwe's President Robert Mugabe and Prime Minister Morgan Tsvangirai held talks Thursday on critical issues that threaten to derail their unity government, including Mugabe's snatch of the telecommunications portfolio from his rival's party.

Zimbabwe's deputy prime minister Arthur Mutambara, leader of a breakaway faction of Tsvangirai's Movement for Democratic Change (MDC), who is the third signatory to September's power-sharing agreement confirmed the meeting, which he is also attending.

The meeting would address "political hygiene matters", Mutambara said Wednesday.

Since its inauguration in February, the new government has been accused of failing to break with the repressive policies of the past.

On Wednesday, MDC ministers threatened to boycott a weekly cabinet meeting chaired by Mugabe after he unilaterally stripped an MDC minister of key powers.

Mugabe last week took telecommunications off Nelson Chamisa and gave the dossier to Transport Minister Nicholas Goche from his Zanu- PF party. The move outraged the MDC, particularly given that telecommunications covers spying.

The ongoing invasion of white-owned farms by Zanu-PF loyalists and Mugabe's refusal to review his unilateral appointments of the central bank governor and attorney general are other issues threatening to scupper the deal and putting the skids on foreign aid and investment.

Finance Minister Tendai Biti has appealed for 10 billion dollars to rebuild the tattered economy but Western donors are waiting for proof of real reforms before committing to anything more than emergency relief for the millions of Zimbabweans, who cannot feed themselves.

The secretary for finance of Zimbabwe's neighbour Botswana, whose President Ian Khama is a vocal critic of Mugabe, said Thursday his country had pledged lines of credit to the steel, manufacturing and leather industries.

Taufila Nyamadzabo refused to put a figure on the credit.

South Africa also said last week it was looking at providing aid for health and education and opening credit lines but has yet to announce a figure.(dpa)