New Zealand will take diplomatic steps to punish Fiji if supporters of Mr George Speight are included in a planned new interim government, the New Zealand Foreign Minister, Mr Phil Goff, said yesterday.
The Fijian military sealed a deal on Sunday with Mr Speight for the release of Fiji's first ethnic Indian Prime Minister, Mr Mahendra Chaudhry, and 26 other politicians held hostage by his group of rebel nationalists since May 19th.
The two sides agreed to leave the appointment of the head of Fiji's next interim government to the indigenous Fijian leaders, the Great Council of Chiefs.
The promised release of the hostages on Thursday would be a positive development, but Fiji would face retaliation from New Zealand if - as expected - it went down a political path along the lines sought by Mr Speight, Mr Goff said.
Mr Goff expected the New Zealand government to end military co-operation with Fiji, cut aid programmes and diplomatic representation, and implement "smart sanctions" against those it blamed for the political crisis.
One of Mr Speight's demands has been for control of Fiji to be in the hands of indigenous Fijians, which would mean the political exclusion of the 44 percent of the population of Indian origin.
Mr Goff questioned whether the new government would include any ethnic-Indians and said the presidential candidate preferred by Speight - former Vice-President Ratu Josefa Iloilo - was an elderly man who might be prone to influence and control.
"The Great Council of Chiefs will, I am presuming, go down the path of least resistance and they won't want to confront Speight having seen the military confront him and fail," he said.
Mr Speight has made plain he was undeterred by international condemnation in demanding the exclusion of Indians from power.
Military control of Fiji has looked shaky in recent days. Speight supporters have closed down a major power station, taken fresh hostages in a village north of the capital Suva and blocked the main highway west of the city.
Protesters occupy a military base in Labasa, on the island of Vanua Levu and villagers on the small island of Levuka yesterday burned down a building and tried to over-run the police station.
New Zealand has continued to recognise the multi-racial Chaudhry administration as the legitimate government in Fiji but Mr Goff said a more pragmatic approach would now be taken.