About 30,000 troops and police are being deployed in major cities across Ecuador in readiness for anti-government demonstrations by indigenous Indians on Saturday.

The Indians, who make up about half of Ecuador's 12.4 million population, are demanding the resignation of President Jamil Mahuad because of his failure to stop the country's economic decline.

The country has been under a state of emergency for more than a week, after trades unions and opposition groups began a series of demonstrations aimed at ousting the president.

"[The President] has not had the political will to fix the country, let him step aside," said Blanca Chancosa, one of the Indian leaders.

Around 40,000 protesters are expected to march on the capital, Quito, to try to seize control of Congress when President Mahuad makes his state of the union address.

The Indians, who plan to stage sit-ins and block highways, paralysed the country for weeks last July with similar protests.

President Mahuad has dismissed the planned demonstrations and warned that he would use force to protect property and people's lives.

Mr Mahuad on Sunday surprised many by announcing that Ecuador would adopt the US Dollar as the official currency to stabilise the ailing economy, which is suffering 60% inflation, the highest in Latin America.

Desperate move

Only two other Latin American countries have taken the same route. Argentina pegged its peso to the US Dollar in 1991 and Panama has long since used the greenback as its currency.

The plan has been seen by some as bold, but others describe it as a desperate attempt by the president to remain in power.

Ecuadorean Indians, whose leaders have gained considerable political power over the past decade, have been particularly angered by the controversial decision.

They view the national currency, the sucre, as a symbol of national sovereignty and believe replacing it will only intensify the country's economic woes.