Peru official suggests Fujimori may leave early

SANTIAGO, Chile (Reuters) -- Peruvian President Alberto Fujimori's chances of staying in power until the end of his term next July are diminishing because of the political crisis rocking his Andean nation, his economy minister said on Tuesday.

Peru's opposition on Monday ousted Fujimori's stalwart head of Congress -- a key ally of a president who has run Peru for 10 years -- and released a video showing his fugitive spy chief presiding over a celebratory dinner with military chiefs earlier this year.

"With the latest developments, it is difficult to say what is going to happen," Economy Minister Carlos Bolona told a business forum in the Chilean capital Santiago. "If you ask me if he is going to stay until July 28, I just do not know."

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"What can we expect of the future?" Bolona asked. "One scenario is that Fujimori continues until July 28, a scenario where the probabilities are getting slimmer."

"Another scenario is that a transition government does little and looks to organize elections as soon as possible," Bolona added. "Anything could happen. Unfortunately, that's how things are and that's how the political situation is."

Peru has been in turmoil for two months since a video was aired showing Fujimori's former spy chief Vladimiro Montesinos, widely seen as the power behind throne during the president's reign, apparently bribing an opposition politician to switch to the government party. A second video was released by the opposition on Monday.

Fujimori also was criticized by the opposition for abruptly leaving the escalating political chaos behind and flying off to a regional trade summit summit in Brunei.

The Montesinos bribery scandal prompted Fujimori to announce he would quit next July after April 2001 elections -- four years early -- and fire Montesinos as head of the notorious national intelligence service (SIN).

Fujimori's increasingly precarious position was underlined by the opposition victory in a censure vote on Monday against his key ally, Congress President Martha Hildebrandt, accused by the opposition of blocking investigations of Montesinos.

Some political analysts said the ouster of Hildebrandt could help stabilize Peru and argued that Congress could name a new head with bipartisan support to help prepare for the April elections. Bolona did not rule out that possibility.

In the newly released video, Montesinos, appearing confident and smiling, is seen presiding over a celebratory meal in the week after Fujimori's victory in a controversial May 28 runoff election.

The video showed Montesinos rising to his feet -- followed swiftly by the interior and defense ministers, the head of the armed forces and the head of the police -- and making a toast.

Montesinos fled to Panama after the scandal broke in September but defied Fujimori three weeks ago and returned, sparking a major manhunt led personally by the president.

Montesinos is now officially wanted on a host of charges from money laundering to ordering torture and murder after some $58 million was found in overseas bank accounts linked to him.

Fujimori departed on Monday to attend an Asia-Pacific Economic Cooperation (APEC) summit in Brunei, scheduled for Wednesday and Thursday. He was then due to attend an Ibero-American summit on Thursday and Friday in Panama.

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