Nairoibi — President Kibaki and Mr Raila Odinga have signed a deal that will see them share power through the creation of a Prime Minister position.
The deal, brokered by Africa Union chairman President Jakaya Kikwete of Tanzania and Mr Kofi Annan, will see the creation of a grand coalition sharing power according to party strength in Parliament.
The deal provides that the PM will coordinate and supervise Ministers, while Cabinet positions will be shared proportionally according to party strength in Parliament.
The President will have the authority to sack Cabinet members, but only with written agreement from leaders of the respective coalition party.
The Cabinet will comprise the President, the Vice-President, the Prime Minister, Deputy Prime Ministers and Ministers.
The coalition will collapse at the end of the current Parliament, or if the parties so agree, or if one partner withdraws.
The signing at Nairobi's Harambee House was witnessed by diplomats and broadcast live on national television.
President Kibaki and Mr Odinga first signed the agreement, then President Kikwete and Mr Annan appended their signatures as witnesses.
The agreement was the result of a five-hour meeting chaired by President Kikwete involving Mr Annan, President Kibaki and Raila Odinga.
First signs of a deal emerged when Mr Annan, soon after the meeting ended at 3pm, told journalists that they had managed to agree and that details would be made public in about an hour.
The two sides have until today failed to agree on how to structure a coalition Government. President Kibaki had maintained that he is ready to appoint a Prime Minister and two deputies, but under the current Constitution.
The Orange Democratic Movement (ODM), on the other hand, insisted that any power sharing arrangement must be cemented through relevant Constitutional amendments. They also want the PM to be named head of Government and the President to be head of State, and equal sharing of Cabinet positions, among others.
Also at the meeting was former Tanzanian President Benjamin Mkapa, who sits with Mr Annan in the Panel of Eminent African personalities who have been driving the mediation since January. The third panellist is former South African first lady Graca Machel, however she did not attend today's meeting.
Both President Kibaki and Mr Odinga were at the venue of the talks accompanied by some of their negotiators, but it is not yet clear whether the negotiators attended the meeting.
Those at the venue include the Government negotiating team that include Cabinet ministers Martha Karua (Justice), Moses Wetangula (Foreign Affairs), Prof Sam Ongeri (Education) and Mbooni MP Mutula Kilonzo. They were joined by Local Government minister Uhuru Kenyatta and Attorney General Amos Wako.
Mr Odinga arrived with his negotiators Musalia Mudavadi, James Orengo, Dr Sally Kosgei and Mvita MP Najib Balala.
President Kikwete arrived in Nairobi on Tuesday soon after Mr Annan suspended the mediation talks that had being going on at Nairobi's Serena Hotel. The decision came after the Government and the ODM negotiators failed to compromise on how to create a Prime Minister position, seen as key in the structure of power sharing arrangement.
The Tanzanian President initially planned to depart Nairobi yesterday, but extended his visit by a day.
Local and international pressure is on President Mwai Kibaki and Mr Odinga to compromise on a power-sharing agreement.
Kenya was thrown into a political crisis after Kibaki was declared the winner of a disputed December 27 presidential election.
Violence that followed the announcement resulted in the death of more than 1,000 people and left over 350,000 others displaced.