The president of Guinea Bissau, Kumba Yala, says he plans to dissolve the government and parliament, to call early elections.

I am not prepared to work with people who are incapable of doing their job

Kumba Yala

Correspondents say the sudden announcement coincides with a long-running dispute between Mr Yala and his prime minister, as the Guinea Bissau Government runs out of money.

They say government employees have not been paid their salaries for the past five months and trade unions have organised a number of walkouts in protest.

There have been two coup attempts in Guinea Bissau since it returned to full civilian rule under Mr Yala in early 2000, following a civil war in which thousands were killed or wounded, or lost their homes.

'Incompetence'

President Yala has accused the government of Prime Minister Alamara Nhasse of being unable to organise tax collection.

"I am not prepared to work with people who are incapable of doing their job," President Yala was quoted as saying by the French news agency, AFP.

Bissau has seen much instability in recent years

The head of state asked the military to seize the 30 or so vehicles the prime minister has put at the disposal of tax officers to collect tax revenue.

"Instead of working, they have used the vehicles for their leisure," Mr Yala said.

In August, Mr Nhasse said there were differences with the president, saying he had not been consulted over dismissals and appointments within the government and the judiciary.

He later said that the "small misunderstanding" with Mr Yala had been "quickly settled".