Mr Yala (right) is accused of failing to solve economic problems

He says the new capital will be Buba, about 200 kilometres south-east of Bissau.

The change will become effective after the construction of a deep-water port in Buba and when a railway line linking it to Mali's capital, Bamako, is completed.

President Yala says Bissau will remain the commercial capital of the former Portuguese colony.

But opposition leaders have condemned the plan as a political gimmick.

The proposal comes ahead of the twice-postponed legislative election now scheduled for 6 July.

Donor pressure

Francisco Fadul, leader of the United Party for Social Democracy of Guinea-Bissau, said the planned capital switch was an electoral ploy designed to distract attention from the country's economic problems.

There were a series of national pay strikes last month and students battled with riot police last weekend during a protest to demand electricity supply for their night classes.

President Yala, who took power in 2000, dissolved parliament in November last year following a row with his prime minister.

The election had been expected to be held in February, within the three-month deadline required by the constitution.

But the internal affairs minister who would have been in charge of running the election was sacked by the president and replaced by a ruling party activist.

The United Nations and the European Community have said the poll must be fair and open.

The last elections in Guinea Bissau were held in 1999 as part of a deal to end a civil war in which about 2,000 people died.