Kenya's political rivals accused each other on Monday of double-dealing that delayed for a second day the formation of a power-sharing cabinet crucial to ending months of post-election crisis.

Opposition leader and prime minister designate Raila Odinga skipped a meeting with Mwai Kibaki, accusing the president's Party of National Unity (PNU) of reneging on a promise to hand his side the roads, local government and foreign ministries.

"This latest crisis in portfolio balance captured the astonishing lengths PNU is willing to go to ensure that it continues to monopolise power," Odinga told reporters.

"Our nation is adrift and without direction, and with each passing day our problems are mounting."

Kibaki blamed Odinga's Orange Democratic Movement (ODM) for the second delay since Sunday, saying he had been surprised to receive "new preconditions and ultimatums" from the party.

"I remain ready and willing to conclude the formation of the coalition cabinet at the earliest possible opportunity," Kibaki said in a brief televised statement.

"This matter must come to a close without further delay in order for us to move forward and focus on urgent matters facing our people," he said, urging Odinga to "engage constructively".

The violence that followed Kibaki's contested victory at a Dec. 27 election eroded Kenya's image as a stable, prosperous country and hurt its economy, currency and stock market.

At least 1,200 people were killed and 300,000 more uprooted in the country's worst crisis since independence in 1963.


SHILLING WEAKENS

Both sides have been locked in a month-long impasse over the cabinet, and Monday's hardening of positions is likely to stoke fears among many Kenyans that the east African country's economic recovery could unravel.

Odinga said he was committed to the speedy implementation of a peace deal brokered in February to end the crisis. He did not say when talks on the cabinet would resume.

"As soon as there's clarity ... I'm ready and willing to meet with President Kibaki to push forward those issues."

The shilling lost ground against the dollar to close at 62.35/45 to the dollar compared with Friday's 61.80/90 on fears there would be no breakthrough on Monday.

Under growing local and international pressure for an agreement, the president cancelled a trip to India on Monday to take part in the discussions.

The European Union said in a statement it was concerned by the deadlock "and urges the parties to maintain the momentum for reconciliation by forming an effective and efficient coalition government as soon as possible."

The EU reiterated it would back "meaningful power-sharing" and work with the new government once it is formed.

The new cabinet was initially due to be announced on Sunday, but Kibaki and Odinga failed to agree on dividing up ministries. They had said they made "substantial progress" in talks, but many Kenyans said they were sceptical.

Sources on both sides said the disagreement involved just a few ministerial posts. Each side will get 20.

One post not in dispute is finance, which means current Finance Minister Amos Kimunya is almost certain to keep his job.