A six-nation committee met in the Nigerian capital Abuja on Saturday to overcome a split between African nations and the so-called "white Commonwealth" on Zimbabwe's suspension.
Mugabe appeared to take no heed of calls by Commonwealth Secretary General Don McKinnon not to compound his isolation as Zimbabwe's ruling party voted to withdraw from the 54-nation organisation if it was not treated as an equal.
The veteran Zimbabwe leader, stung at being barred from the four-day Abuja summit, said the Commonwealth had members who believed they were superior to others, in a diatribe directed at one of his fiercest critics, British Prime Minister Tony Blair.
"He is arrogant. He thinks by virtue of his being white, by virtue of his being the prime minister of Great Britain, he can dictate to us.
"Like 'Animal Farm' (the Commonwealth) has now produced members who feel they are more equal than others," Mugabe said, referring to the classic George Orwell satire on a totalitarian state.
The troubled southern African country, which like most members of Commonwealth is a former British colony, was suspended in March last year after Mugabe's re-election was marred by violence and accusations of fraud.
Zimbabwe is mired in economic crisis, against a background of political repression and unrest triggered by a controversial programme to seize white-owned farms and distribute the land to blacks.
"(Tony Blair) is arrogant. He thinks by virtue of his being white, by virtue of his being the prime minister of Great Britain, he can dictate to us"
Mugabe's ZANU-PF approved a resolution at a party conference to quit the Commonwealth if the country is not treated on equal terms, and a spokesman said it would be carefully watching moves in Abuja.
The committee - made up of leaders from Australia, Canada, India, Jamaica, Mozambique and South Africa - is to report back to Commonwealth leaders during a two-day retreat, which began on Saturday after a tree-planting ceremony.
Many African nations, led by South Africa, want Zimbabwe to be brought back into the fold to encourage Mugabe to push forward with reforms, while the "white Commonwealth" of Britain, Australia and New Zealand favour a tough line.
But McKinnon insisted that Commonwealth leaders wanted to re-engage with Harare.
"I would hope that Mugabe would take a breath on this one and realise that the Commonwealth meeting here really does want to move on on Zimbabwe. There's a lot more to gain from being inside the Commonwealth than outside it."
Pakistan stays out
McKinnon also said that Pakistan would remain suspended from the Commonwealth despite progress in restoring democratic institutions.
He said Commonwealth ministers who reviewed Pakistan's performance had noted that some reforms accepted by President Pervez Musharraf had yet to be ratified by parliament.
Nigerian President Obasanjo (R) with Australian PM Howard (C) and Commonwealth SG McKinnon
"They concluded that there were some outstanding issues," McKinnon said.
Pakistan was suspended from the Commonwealth in October 1999 after Musharraf seized power in a military coup, but his government has since held parliamentary elections and made progress towards creating or reviving democratic institutions.
Musharraf described the decision as "regrettable and unfortunate."
Obasanjo and other leaders have said that they are determined not to allow the Zimbabwe dispute to disrupt efforts to promote democratic ideals, forge a common position on global trade talks and unite against "terrorism" and HIV/AIDS. But summit talk has been of little else.