Cracks appear between Kostunica and his allies

US relaxes sanctions but President admits he is not yet in full control of country as Milosevic plots revenge from the sidelines

Yugoslavia's new President, Vojislav Kostunica, yesterday admitted he is not yet in full control of Yugoslavia, saying he faced "almost as much trouble from my friends as from my enemies".

Yugoslavia's new President, Vojislav Kostunica, yesterday admitted he is not yet in full control of Yugoslavia, saying he faced "almost as much trouble from my friends as from my enemies".

Although his grip on power, under pressure from allies of the deposed president Slobodan Milosevic, was boosted by a United States decision to relax sanctions, a move by the IMF to reopen its doors to Belgrade and a British request for the restoration of diplomatic relations, Mr Kostunica complained in an interview with the New York Times that some of his allies were issuing policy statements he did not agree with.

In comments which indicated the first cracks in the opposition alliance that toppled Mr Milosevic, the new president singled out Zoran Djindjic, his most powerful backer, who has taken a number of moves on his own initiative that have caused problems - including suggesting that the army chief of staff should resign, which provoked a furious response from the army.

Mr Kostunica also admitted the scramble by opposition members to grab control of ministries and state-owned companies was out of control, and was being pursued with scant regard for the law.

"I cannot justify all that's going on," he said. "On the surface there is a peaceful, democratic transition, but below the surface is a kind of volcano."

In an interview with Italian television Mr Kostunica also hinted that he would not stand in the way of a break up of the federation of Serbia and Montenegro. "If the will of the Montenegrins is to not belong to the federation, this will be respected," he said.

Mr Kostunica's new authorities held urgent meetings with Mr Milosevic's allies, ahead of a deadline today by which time they have warned the deposed president's men to hand over power or face renewed anger on the streets.

The government of Serbia, the larger of federal Yugoslavia's two republics, is still technically in power, but is under pressure to accept new elections on 17 December.

On Wednesday, it ordered police to seize back control of television stations and other state institutions. But so far, the police have made no move, and the Serbian vice-Prime Minister, Vojislav Seselj, yesterday acknowledged that the Serbian government no longer controls the police, claiming in an extraordinary speech that police were now under the control of the CIA.

A former Milosevic ally yesterday said that the Serbian government's refusal to hand over power had been ordered by Mr Milosevic himself, and was part of a deliberate policy to "create obstruction, chaos and anarchy" in order to seize back power.

"Milosevic is desperately trying to stabilise his ranks, conducting very high activity," said Dusan Mihajlovic, who is known to have strong connections with the secret police, much of which remains loyal to Mr Milosevic.

The deposed president remains out of sight. He is believed to be holed up in his Belgrade residence, guarded by 100 paramilitaries commanded by his personal bodyguard, General Senta Milenkovic.

But there are signs that many among Mr Milosevic's allies are giving up. The notorious "Frankie's Boys" paramilitaries, believed to be responsible for much of the violence in Kosovo, have switched sides, and are now backing Mr Kostunica.