* Tsvangirai announces party decision to join government
* 60,000 people infected by cholera outbreak
* Britain says new government will be judged on its actions
* South Africa ready to help rebuild Zimbabwe
By Nelson Banya
HARARE, Jan 30 (Reuters) - Zimbabwe’s opposition decided on Friday to join a government with President Robert Mugabe next month, ending a political deadlock that has worsened an economic and humanitarian crisis.
Opposition leader Morgan Tsvangirai, who had been under heavy pressure from southern African leaders, announced the decision after a meeting of his Movement for Democratic Change’s (MDC) National Council. He is now set to become prime minister.
“Now is the time for us to put aside our political differences, to prioritise the welfare of the people,” Tsvangirai said in a statement after the decision in Harare.
It could be a step towards saving the ruined economy of the once prosperous country, where half the people now need food aid and Africa’s deadliest cholera epidemic in 15 years has killed 3,100 people and infected 60,000.
But it is unclear that old foes Mugabe and Tsvangirai will be able to work together effectively to persuade Western states to provide the investment and aid needed by a country with the world’s highest inflation rate and an almost worthless currency.
“Without the support of those governments, the deal will have major difficulties in really opening the way for a turnaround of the situation in Zimbabwe,” said Mike Davies, Middle East and Africa expert at risk analysts Eurasia Group.
Zimbabweans have been longing for a new leadership. The few who have jobs line up for hours outside banks to withdraw enough to buy a loaf of bread. Millions have fled to Zimbabwe’s neighbours, straining regional economies.
Some rejoiced after the announcement on Friday.
“I just had to be here to witness history,” said Edwin Masango, a city office worker who left his post to join scores of chanting MDC supporters who mobbed Tsvangirai. “I do not remember being this happy and hopeful in a long time.”
Shares in Zimbabwe-focused investment group LonZim LZM.L jumped over 18 percent.
Mugabe and Tsvangirai signed their power-sharing deal in September to end a crisis after elections that were condemned around the world, but implementation had been held up by disagreements over who would get top cabinet positions.
Under pressure from regional leaders, Tsvangirai agreed at a summit this week to share control of the Home Affairs ministry, responsible for the police, with Mugabe’s ZANU-PF for six months. The government is set to be formed by Feb. 11.
Some MDC leaders had felt Tsvangirai was taking a risk by agreeing to work with Mugabe, a master political tactician in power since independence from Britain in 1980, who has defied Western sanctions and resisted growing calls to step down.
“They have to make sure they can engage in a way that allows them to achieve what they want and that means they have to learn how to engage Mugabe and the people around him,” said Adam Habib, political analyst at the University of Johannesburg.
In Washington, the United States voiced skepticism over the accord and said U.S. aid would come only when a representative government was in place.
“What is important here is actions and not words. We want to see real, serious power-sharing by the Mugabe regime,” a State Department spokesman said.
In Harare, Daniel Shoko, an unemployed youth, said he was so pleased by the agreement that he had postponed his plan to leave the country but he remained cautious.
“The MDC will have to be careful as it deals with ZANU-PF. They have to avoid being swallowed up,” he said.
Tsvangirai won most votes in a presidential election last March but without enough votes to avoid a run-off. He pulled out of the second round, citing attacks on supporters, and Mugabe was declared the winner unopposed.
Although many countries stand ready to help Zimbabwe, the global financial crisis means there is less money available than there might have been had the deal been reached sooner.
“Some foreign investors did buy into Zimbabwe around the time of the election last year and they have been very dismayed by what has happened since,” said Richard Segal, a strategist at UBA Capital.
The last official figure for inflation was 231 million percent last July. Prices have been doubling every day and the government said on Thursday it would let Zimbabweans use foreign currencies.
Seven million people, or half the population, will need food aid in February and March, the U.N’s World Food Programme said.
South African President Kgalema Motlanthe said his country, the continent’s biggest economy and regional power, was ready to help rebuild its neighbour.
“This stage is really critical in terms of achieving political stability and the first step towards the economic recovery of that country,” Motlanthe told Reuters at the World Economic Forum annual meeting in Davos.
South Africa’s government said an inclusive government could prepare for free and fair elections.
British Foreign Secretary David Miliband said the new government would be judged on its actions and that it was important that new ministers and especially Tsvangirai be allowed to lead change.
“This will determine our formal engagement, including the provision of donor support. The international community will be looking for the government to demonstrate, through its actions, a clear commitment to reform,” Miliband said in a statement.