By Peter Greste in Panama

Former US President Jimmy Carter is to formally end almost a century of US occupation in Panama, in a ceremony turning the Panama Canal over to the Central American country.

Mr Carter began the process more than 20 years ago when he signed a treaty with his then Panamanian counterpart Omar Torrijos to end American occupation of the Panama Canal Zone at noon on 31 December 1999.

The Carter-Torrijos treaty committed the US to withdrawing its troops and closing dozens of military bases, and handing over the canal's management to Panamanian control.

At the time, critics slammed the move as abandoning a vital security asset just as the United States was confronting growing leftist revolutions throughout Central America. They also accused Mr Carter of exposing the canal its self to security threats.

Handover debate

More than two decades on, the debate about the wisdom of handing the canal back continues.

"By withdrawing from the Panama Canal, we're allowing evil people to move in," said Republican Congressman Dana Rohrabacher.

"There are the communist Chinese who've corrupted the bidding process to win control of port facilities at either end of the canal, and the narco-terrorists just over the border in Colombia."

The Hong Kong-based shipping giant Hutchison Whampoa recently won the contracts to operate port facilities in Panama, and critics like Congressman Rohrabacker say the company's chief executive officer has close connections with the leadership in Beijing.

They say it is a clear attempt by mainland China to seize control of one of the world's most important shipping lanes.

"To put it politely, that's hogwash," the president of the Panamanian Chamber of Shipping, Jorgen Dorfmeir, said.

"It's nothing more than rhetoric by some radical Republicans who have just woken up to the fact that Panama is getting the canal back, and they don't like it."

There are others in the US who argue that the original treaty with Panama granted Washington control over the canal in perpetuity, and that Jimmy Carter had no authority to order the withdrawal.

Sovereign US territory

The US created the canal almost from the start. French engineers first tried in 1880, but had to withdraw 10 years and 20,000 lives later, beaten by the scale of the task and disease.

Then in 1903, American gunboats backed up a fledgling Panamanian independence movement fighting to free what was then a northern province of Colombia.

In return, the new Panamanian Government granted Washington the right to build the canal and control a five-mile wide strip of land either side of it. It became known as "The Zone" - in effect a slice of sovereign US territory dividing Panama in two.

Ten years after they started, engineers sent the SS Ancon from the Pacific Ocean to the Atlantic - the first of more than 800,000 ships to pass between the oceans.

The canal has since become one of the world's most important commercial shipping lanes - it hacks off some 3,000 miles from a sea journey between the US East Coast and the Far East, or 5,000 miles for a ship carrying bananas from Ecuador to Europe.

And if the Americans are worried about security, the shipping industry is concerned about political interference.

"If that happens, then they could kill off the goose that lays their golden eggs," Jorgen Dorfmeir said.

Panamanian concern

But locals too are concerned about the transfer. Millions of Panamanians, like retired canal pilot Harmodio Herrera, are delighted at what they see is the end of a colonial era, but they are also worried that local inexperience may destroy the one asset that keeps Panama alive.

"I think we have the technical skill - there's no doubt of that," he said. "But I just hope that its managed properly. If the government gets involved, or if they make a mess of the management, then we could have some problems."

The government has dismissed all the concerns as understandable but misguided.

"We've addressed all those issues, and more," the Panamanian minister for Government and Justice Winston Espadafora said.

"The Americans kept the canal secure for almost 100 years, so they've taught us a lot. We're also working very closely with them to gather intelligence about security threats and about drug trafficking, so we are confident that we can keep both at bay.

"And we've set up a body of laws that means the government cannot intervene in the Canal Authority. Its independence is guaranteed," he said.

There is one other factor that Mr Espadafora said many critics had failed to take into account.

"There are so many people who depend on this canal for their business - not just Panamanians but trading countries as well - that the commercial pressures alone should keep the canal secure and independent for a very long time."