Zimbabwe's opposition leader Morgan Tsvangirai was sworn in as prime minister on Wednesday after months of wrangling with President Robert Mugabe over a power-sharing deal aimed at rescuing the ruined country.

The pact agreed in September raised hopes a new leadership could ease widespread hardships, but mistrust and continued quarrels between the old foes have put doubts over whether they can work together to ensure aid and investment flows in.

Tsvangirai, 56, was sworn in by Mugabe, 84, who has ruled with his ZANU-PF party since independence from Britain in 1980. Tsvangirai gave a little smile as he finished taking the oath in front of his old enemy.

He won a first round presidential poll against Mugabe last year but boycotted a subsequent run-off over violence, leading to deadlock that has worsened a crisis marked by hyper-inflation, food shortages and a cholera epidemic.

Implementation of the power-sharing deal only came after increased pressure from southern African countries, fearing a total meltdown in once-prosperous Zimbabwe.

"This is an imperfect settlement, and the balance of power favours Mugabe and ZANU-PF. Tsvangirai will probably have very little room to manoeuvre, but over time he will become as liable for the failures of the ZANU-PF government," said Aubrey Matshiqi of South Africa's Centre for Policy Studies.

"Another way of looking at it is that from an imperfect settlement may arise a lasting solution. That cannot be precluded."    
Mugabe is one of Africa's craftiest political operators. Tsvangirai is a former trade union leader known for fiery speeches who gained respect at home and abroad by fighting graft and rights abuses. But his leadership skills in government remain untested.

Critics within his Movement for Democratic Change (MDC) accuse Tsvangirai of dictatorial tendencies and surrounding himself with a "kitchen cabinet" that makes important decisions at the expense of the party.

Zimbabweans hope the new government will bring policies to revive a country suffering unemployment above 90 percent, where prices double every day, half the 12 million population need food aid and a cholera epidemic has killed nearly 3,500 people.

But analysts say Tsvangirai and Mugabe have chosen political allies, rather than technocrats with international respect, for their cabinet teams, running the risk of further mismanagement that could worsen the economic decline.

Zimbabwe's fate depends heavily on foreign investors and Western donors, who have made clear money will come only when a new democratic government is formed and bold economic reforms are taken -- such as reversing nationalisation policies.

"Zimbabwe's journey towards recovery will be long and difficult," said EU development commissioner Louis Michel.

Mike Davies, Middle East and Africa analyst at Eurasia Group, doubted the new government would be able to fully overturn a decade of economic decay. - Reuters