Mugabe has been in power since the country's independence from Britain in 1980 [AFP]

The United Nations offered Robert Mugabe, Zimbabwe's president, unusual incentives to step down from office in 2000, according to leaked US diplomatic cables reported in a UK sunday paper, The Observer.

Kofi Annan, who was the head the UN at the time, is said to have offered Mugabe a retirement deal including a safe haven overseas and a financial package funded by Muammar Gaddafi, the Libyan leader.

"Kofi Annan, in the recent meeting in New York during the millennium summit offered Mugabe a deal to step down," said the cable, which cited an unnamed source of the then-opposition Movement for Democratic Change (MDC).

"Although (the MDC source) said the MDC was not privy to the details, he surmised that Annan's supposed deal probably included provision of safe haven and a financial package from Libyan president," it said.

"The opposition party heard that Mugabe turned down the offer the following day after discussing it with the first lady."

Mugabe, 86, who ruled over the country for three decades since independence from Britain in 1980, has shared power with his arch-rival, Morgan Tsvangirai, leader of the MDC, since a disputed presidential election in 2008.

But the uneasy "unity" government has been on the brink of collapse for months.

Mugabe said on Saturday he was "very confident" of victory after his ZANU-PF party backed him to contest a likely election next year against Tsvangirai.