The exodus of Fijian Indians should start soon as some of the brightest and better off, shut out of power by the strongly nationalistic interim government, decide to leave the sinking ship which was their island home.

After the two coups of 1987, when the indigenous Fijians again defied the world and democracy to enforce a racially-based constitution, more than 65,000 Indians packed up and left, and the economy had only just got back on its feet.

Yesterday the country returned to civilian rule after the two-month crisis, as the military regime handed power to the new President, and the rebels who had been holding parliament gave up their fearsome armoury of weapons. Rebel leader George Speight claimed victory, saying the new President would support his side's philosophy in composing a strongly Fijian government to replace the elected one led by the deposed ethnic Indian prime minister, Mr Mahendra Chaudhry.

One Indian regarded the new arrangements as the south Pacific's own version of South Africa's apartheid, and surprisingly the garrulous Mr Speight agreed with him: "It's apartheid. I don't blame him. Perhaps he feels like how the whites feel when, you know, when the Africans want to take over their own country. Get used to it, you know. It's a worldwide phenomenon."

Mr Speight's words will as ever be cold comfort to the 44 per cent of the population who dominate the mostly retail business sector and also run most of the sugar-cane farms on leases from Fijian land.

Most of the descendants of the indentured labourers, who came from India more than 100 years ago to work in the British colonists' cane fields, remain almost as dispossessed and poor as their forebears and have no choice but to stay and bear it.

At worst they can expect continued instability and possibly violence and at best an economy once dependent on tourism and preferential prices for sugar wrecked and helpless due to international isolation.

And the ethnic Fijians will also have to pay the price of Mr Speight seizing power.

One promising young Fijian was expecting to spend the next two years at Harvard on a business degree to benefit his developing nation, but the glittering prizes were suddenly pulled away from him when the Japanese withdrew their funding in response to the coup.

Australia could impose sanctions early next week after its Prime Minister, Mr John Howard, held talks with the now free Mr Chaudhry seeking his advice on the best way to retaliate. Australia's foreign affairs department has already warned all Australians to leave the capital, Suva, for their own safety.

Roadblocks are being enforced around the international airport, and four tourist resorts, which in the earlier coups were always untouched, have been overrun by local tribesmen pursuing land claims in the lawless environment.

In the worst case, managers of the Laucala Island Resort, Ric and Carol West, were beaten, bound and gagged by drunken and armed villagers who vandalised the facilities.

The resort had been closed since the coup began two months ago, and the tribesmen, who carried cane knives and steel pipes, released the Wests and left just in time to benefit from the amnesty on "political acts" which Mr Speight and all his followers were granted.

The New Zealand government has already warned the nation is slipping towards anarchy.

The New Zealand Foreign Affairs Minister, Mr Phil Goff, said Mr Speight was self-serving because democracy didn't serve his own ambitions. "These people are self-serving. They don't like democracy because democracy didn't serve their own ends," he said.

Mr Howard said yesterday Mr Speight and his followers were arguing for a racially-prejudiced constitution. "They are really saying that the Fijians of Indian heritage are not entitled to the same rights in Fiji as Fijians of another heritage," he said. "Now that just isn't acceptable. It's not acceptable in Australia and it can't be accepted in Australia." But true to form, Mr Speight, whose hand-picked men have been appointed as the new President and Vice-President, has warned his first-world neighbours to "butt out" of Fijians' business.

"Any attempt by anybody to return Fiji to the status quo before the May 19th coup will be met with the same resistance we showed to the army of this country," he said. "It is about time the world started listening to the fact that Fijians have the ultimate right to determine where Fiji goes in its future."

It was a smiling Mr Speight who showed off the 70 guns, including semi-automatics, pistols and rifles, his men used to take the hostages and throw out the first Indian-led government in Fiji's history.

ONE GUN was held to Mr Chaudhry's head, but Mr Speight said he held no animosity towards the former prime minister, as Mr Chaudhry had said of his captor shortly after his release on Thursday.

In fact, in the final hours before 56 days of captivity ended, the two shared a bowl of yaqona, the mildly narcotic drink, in a ritual as central to Fijian life as the Irish cup of tea, and embraced.

Mr Chaudhry then accepted a sevusevu, or whale's tooth, in a traditional ceremony of forgiveness from the man who had overthrown him and his government.

"I don't hate Indians. I just don't like what they do when they're in power," said Mr Speight later, without a hint of irony as a man who boasts his best friend is an Indian.

"I don't like the fact that they have been victims, along with some Fijians, of a certain perception and expectation of life because of the 30 years of programming under democratic, Commonwealth-style democracy." Since he stormed parliament in the capital, with a handful of special forces on May 19th, taking Mr Chaudhry and 26 others hostage, Mr Speight has seen all his demands met.

The 1997 constitution, allowing non-ethnic Fijians such as Mr Chaudhry into power, has been ripped up. Mr Speight, a failed businessman, demanded and received a full amnesty for him and his supporters.

The tribal Great Council of Chiefs, an unelected indigenous body, also elected as President a supporter of Mr Speight, Mr Ratu Josefa Iloilo. The hostages were released under an agreement signed on Sunday by Mr Speight and the army, which declared martial law on May 29th after Mr Speight's supporters rioted through Suva.

But the unrest and race hate stirred up by Mr Speight and his supporters during the hostage drama, which has seen ethnic-Indian shops looted and thousands of Indians flee over a widespread resentment of Indian business success, have continued to grip the island.

Yesterday the Great Council of Chiefs installed as Vice-President Mr Ratu Jope Seniloli, who was also backed by Mr Speight.

The chairman of the meeting, former prime minister Mr Sitiveni Rabuka, who led the two coups of 1987, said the chiefs did not give in to Mr Speight, although both men had been endorsed by him.

But he warned the drama had left the Fiji islands badly damaged. "Nobody wins a coup," he told a news conference. "The whole nation suffers."