Robert Mugabe, Zimbabwe's president, has reached a deal with a breakaway faction of the Movement for Democratic Change (MDC) in power-sharing talks that could lead to the formation of a government, according to a ruling party official.

Arthur Mutambara, who heads a splinter group of the MDC, signed up to a power-sharing accord late on Tuesday, a Zanu-PF official said.

"A deal has been reached between President Mugabe and MDC-Mutambara faction which has been signed in the presence of President Mbeki," the official said.

He added the deal would pave the way for a government.

Mutambara has refused to comment before Thabo Mbeki, the South African president, who is mediating the talks, makes a statement.

Morgan Tsvangirai, who leads the main faction of the MDC, earlier walked out of a third-day of the talks, without commenting to the media.

The three Zimbabwean leaders have said little publicly about the talks, but pressure has been building for the political rivals to resolve Zimbabwe's political crisis, compounded after Mugabe's controversial re-election in June.

Mbeki, who has been mediating the Zimbabwe talks, was due to fly home later on Tuesday.