Zimbabwe's Movement for Democratic Change (MDC) has agreed to join a unity government led by Robert Mugabe, the country's president, Morgan Tsvangirai, the MDC leader, said.

"We are going into this government. That is what the council has decided," Tsvangirai told reporters on Friday after a meeting of the national council of the MDC.

The MDC decision to join the government should put into effect a long stalled power-sharing deal under which Tsvangirai would become prime minister.

Nelson Chamisa, a spokesman for the MDC, told Al Jazeera: "The party has decided to ensure we undertake our side of the bargain by participating in the inclusive government."

He cautioned that there were still some issues to be settled, but said: "We are ready to start the reconstruction, to start the democratisation and national healing."

Achieving 'stability'

The deal, signed by the MDC and Mugabe's ruling Zanu-PF party in September last year had stalled following disputes over allocation of key cabinet portfolios.

Regional leaders, who had been mediating to help the Zimbabwean rivals settle their differences, have been pressing for the unity government to be formed by February 13.

Kgalema Motlanthe, the South African president, told Reuters at the World Economic Forum annual meeting in Davos on Friday: "This stage is really critical in terms of achieving political stability and the first step towards the economic recovery of that country."

Mugabe criticised

Also speaking on the sidelines of the World Economic Forum, Raila Odinga, the Kenyan prime minister, was sharply critical of Mugabe.

"Mugabe has outlived his usefulness and the time has come for the world to stand up strongly and tell Mr Mugabe that the time for him to quit is now," he said.

Mugabe has been under growing pressure to  resign [File: EPA]

Luisa Diogo, Mozambique's prime minister,  told Al Jazeera: "What we should do as Africans - what we should do as the international community - is to support this decision.

"Now that it's happened we should support it and try to make it work in Zimbabwe."

Under the power-sharing deal, Mugabe is to continue as the president while Tsvangirai becomes the prime minister.

But with the country in a deep financial mess and fears of a humanitarian crisis, the two men would face stiff challenges even after the political deadlock is resolved.

Challenges

Their top priority would be to agree quickly on an economic policy to ease daily hardships and persuade Western donors to pump money into the country.

John Makumbe, a Zimbabwean political commentator, said: "It's such a huge gamble particularly if Mugabe doesn't deliver on the other issues that the MDC has been demanding.

"It's a test for the MDC which will have a big bearing on its future."

Tsvangirai is promising that he will usher in a "New Zimbabwe" with free-market policies.

He has vowed to end hunger and create new jobs in a country with an unemployment rate of 80 per cent.