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Monday, August 31, 1998 Published at 03:24 GMT 04:24 UK

World: Americas

Panama rejects two-term president

Campaigners deliver their message in Panama City

In a blow to Panama's ruling party, voters in a referendum have rejected a proposal to lift a constitutional restriction that bans President Ernesto Perez Balladares from standing for re-election.

President Balladares had asked voters to approve an alteration to the constitution and allow him to run for a second consecutive five-year term in office next May.

[ image: Ernesto Perez Balledares: cannot run again for a decade]
Ernesto Perez Balledares: cannot run again for a decade
He had said he wanted to stay on to ensure his economic reforms were not reversed.

However, correspondents say that another term of office would ensure he has control over the Panama Canal when the US relinquishes the waterway at the end of next year.

With about two-thirds of the votes counted, opponents of the proposal outnumbered those in favour by almost two-to-one.

The governing coalition, which had earlier claimed victory, has now acknowledged that it has lost the vote.

After the result became clear, the president went on television and said he accepted the people's verdict with "with humility and with great pleasure".

The 52-year-old politican - who is a millionaire businessman - will now have to sit out two terms and wait until 2009 if he wants to run again.

Correspondents say voters may have been influenced by Mr Balladares' past association with the former military leader, General Noriega - who is in prison in the United States after being convicted of drugs offences.

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