Fujimori 'denies seeking asylum'

Mr Fujimori says he will return to Peru but has not said when

Peruvian President Alberto Fujimori has cancelled a trip to an Ibero-American summit in Panama after denying rumours that he was seeking political asylum in Asia.

Mr Fujimori said he was staying on in Japan for the moment where he was continuing contacts with the country's economic officials.

Earlier, the president had pledged to return home after his visit to Japan.

Two months ago, a corruption scandal forced Mr Fujimori to call new elections and announce his intention to step down early.

Popular pressure is mounting on Mr Fujimori to resign

In an interview with the French news agency AFP, he rejected the asylum speculation and said he was considering standing in next April's congressional elections.

However, Mr Fujimori - who is of Japanese descent - gave no indication of when he might return to Peru from Tokyo.

Mr Fujimori attended the summit of Asian and Pacific leaders in Brunei earlier in the week, but spent much of his time trying to dismiss opposition claims that he was seeking political asylum in Malaysia.

Conspiracy theory

The BBC correspondent in Lima says that for everything the president says or does now, there is a rumour or a conspiracy theory to go along with it.

The embattled Mr Fujimori, 62, is coming under mounting pressure to resign because of a bribery scandal involving his former spy chief, Vladimiro Montesinos.

The incident has already led him to call early presidential elections in which he says he will not stand.

Paniagua: Hitting back for the opposition

When and if Mr Fujimori does eventually return home, he will face an increasingly difficult political situation. A number of his long-term allies have either resigned or lost power.

More seriously, on Thursday this week, his government lost control of Peru's Congress to the opposition - for the first time in eight years.

Valentin Paniagua of the Popular Action Party, was elected speaker by 64 votes to 51, after Martha Hildebrand - one of Mr Fujimori's closest allies - was ousted in a vote of censure on Monday.

Moral incapacity

Correspondents say the shift of power opens the way for possible congressional efforts to remove Mr Fujimori on grounds of "moral incapacity".

Confusion about Mr Fujimori's plans has been fuelled by some ministers, who suggested he might resign even before next April's elections.

The president has insisted he will stay in office until next July.

After the bribery scandal became public, Mr Montesinos fled to Panama, then returned after failing to be granted asylum, and has now vanished.

Peru's attorney-general is also investigating reports that Mr Fujimori indirectly received election funds from slain Colombian drug baron Pablo Escobar.