EAST Timorese Prime Minister Mari Alkatiri was last night stripped of all power to deal with the crisis afflicting his country.
President Xanana Gusmao declared a state of siege, assuming sole responsibility for defence and national security from Dr Alkatiri.
The move came only hours after first lady Kirsty Sword-Gusmao said Dr Alkatiri should "step down" to avoid being sacked by her husband as a catalyst for peace.
Ms Sword-Gusmao said the strife-torn nation's Government needed to show "it is prepared to put the interests of ordinary citizens above the needs of the (ruling Fretilin) party, and I think that is part of the problem".
"We support calls for his resignation. There's certainly a push in that direction," she said.
Mr Gusmao's declaration last night removes any meaningful power from Dr Alkatiri and his Fretilin party cabinet.
Speaking at the end of a marathon two-day meeting of the Council of State, Mr Gusmao said last night the emergency measures were needed to quickly re-establish public authority and create the conditions for a return to law and order in the fledgling nation.
He singled out the need to urgently provide humanitarian assistance to an estimated 50,000 people displaced by ethnic violence that exploded in deadly riots on April 28.
Interior Minister Rodrigo Lobato and Defence Minister Roque Rodrigues, seen as instrumental in provoking the desertion of a third of the country's army (F-FDTL), are expected to resign today after being stripped of all powers.
Dr Alkatiri's position was not mentioned in last night's statement from Mr Gusmao, apart from to say the declaration of the state of siege had been made with the Prime Minister's "close collaboration and permanent interaction".
This was most certainly a fig leaf to cover the wounded pride of Dr Alkatiri, who opposed Mr Gusmao's decision two weeks ago to request Australian intervention.
Mr Gusmao said last night he was assuming the special powers under Sections 90 and 91 of the constitution in accordance with the provisions of Law No2.
It means the President, who supports the opposition Democrat Party, shall have full responsibility for the ministries of defence and interior, placing the 1500-member army and 3400- strong police force under his sole command.
Mr Gusmao said he expected to convene the national parliament soon to discuss the proclamation of emergency which he said would last for 30 days, but could be extended if required.
And he appealed to all East Timorese armed with weapons, explosives, ammunition or military equipment to hand them over to the Australian-led intervention force.
He will also oversee the operations of the 2200-strong force, which includes troops from Malaysia and New Zealand.
With her husband "laid low" with three herniated discs in his back since the violence erupted last week, Ms Sword-Gusmao has been more outspoken than the President, who until last night limited his comments to calls for calm in his first public appearance on Monday.
But would Mr Gusmao move to sack Dr Alkatiri and remove what they saw as the obstacle to peace in Timor?
"I would hope that it does not come to that, but I don't think anything is impossible at the present time," she said.
Last Tuesday, Ms Sword-Gusmao personally told 40 families who had taken shelter in her son's preschool that it was safe to go back to their homes.
"We were strongly of the view the violence had abated," she said yesterday.
"They were saying there's more ahead, and within the next 24 hours all hell broke loose.
"Neither Xanana nor myself could have predicted that, but when you have lived with political violence for most of your life you can smell it coming a mile away."
Ms Sword-Gusmao, an aid worker who moved from Melbourne to Dili in 1999, denied her husband was suffering from a debilitating illness, saying he was sufficiently mobile to chair the national crisis talks.
"It's been two years now without any problem ... He's fine actually, apart from his back."
The couple's three children Alex, 6, Kay-Olok, 4, and Daniel, 18 months, have been house-bound since the violence erupted two weeks ago.