Louise Williams – In the early hours of yesterday morning a deal was done – the last deal for President Soeharto.

His old ally, Mr Harmoko – the longest-serving Information Minister in Mr Soeharto's New Order Government, who helped manipulate and restrain the media to hide the realities of the President's rule – reappeared as executioner.

As Speaker of the Parliament and chairman of Mr Soeharto's ruling Golkar Party, Mr Harmoko had that evening dealt his patron a fatal blow. He announced that the Parliament, a body filled with Soeharto crony politicians, would bow to the demands of the tens of thousands of student protesters occupying the building and grant a special session, effectively to commence impeachment proceedings against the President.

Mr Soeharto would be forced to account for the excesses of his Government before his peers – otherwise he could resign. The powerful head of the armed forces, General Wiranto, would publicly agree to protect his wealthy family and promise to defend the constitutional process which hands power to another man whose career Mr Soeharto has built, Dr Jusuf Habibie.

"Now he does not need to submit a statement of accountability," said one insider. "His worry was that he was going to be humiliated appearing before a special assembly even if most of the members are his friends. For him this is a clear-cut exit."

But for the new leader, nothing is clear cut. President Habibie has no independent power-base, and without Mr Soeharto's backing few believe he will survive the power-struggle which his mentor's resignation will unleash.

While Mr Soeharto ruled, the many political factions – some driven by their head's personal ambition, others by loyalty to religion or the armed forces – were neutralised by their inability to win the top job. Now the guessing game in Jakarta is how political ambitions which have been stifled for more than 30 years will be played out.

Outside the elite power-struggle remain the students, the Islamic leader Mr Amien Rais, and the democracy figurehead Ms Megawati Sukarnoputri, who are yet to endorse the new Habibie Government. They may yet see their demands for democratic change sacrificed to personal ambitions.

"Habibie is by no means in a strong position," said an Asian diplomat. "Many of the students think that if the President steps down the Vice-President should go as well – they're a package. They want change and new elections as soon as possible." Another predicted early changes. "What we have now is a split in the elite. There are meetings going on already involving forces who want to try to get Habibie out."

Dr Habibie's power-base is in the Indonesian Council of Muslim Intellectuals (ICMI), a Government-approved body set up to promote the interests of the majority Muslims and prevent Islam becoming a vehicle for opposition. Within the Parliament several prominent members of the military faction who support this camp are believed to be behind Dr Habibie.

But Mr Harmoko and other MPs are also positioning themselves. The 500-member Parliament is stacked with former Soeharto loyalists elected under a political system which permitted the Government to vet candidates and restrict political parties.

"The Parliament wants to capitalise on the momentum for their own gain. They know Soeharto is unpopular so they can use the situation to regain popularity themselves," an analyst said.

If the street protests continue, MPs retain the option of calling a special session to oust Dr Habibie, who is unpopular with the armed forces.

The insider suggested part of the deal for Mr Soeharto's departure was the speedy exit of Dr Habibie, rather than the drawn-out process of his presiding over political reforms. "I heard there was an unwritten gentlemen's agreement that Habibie would not stay too long – the military is already circulating the names," the source said. "But Habibie's game plan may be to stretch this out. In the meantime he can make a deal with Amien Rais, because he too wants his share of the cake."

Mr Rais and Dr Habibie once worked together in the ICMI, and they share similar views on Islam.

For the armed forces to come back into the power-game constitutionally would require a special parliamentary session to remove Dr Habibie and replace his Government with a civilian-military coalition, possibly linking the armed forces commander, General Wiranto, and a pro-reform economist, Emil Salim, or former vice-president, Mr Try Sutrisno.

A member of the Human Rights Commission, Mr Marzuki Darusman, said the military was the key.

"The crucial factor will be the armed forces. If they are thinking of taking over, then that would be a misstep. But Habibie may not be able to mobilise the support and legitimacy needed for the new Government, and then there would be a temptation to take things further on the part of the armed forces."

Mr Darusman believes the armed forces will want to retain their security and political role. But he said prosecutions under subversion laws must be dropped and jail sentences for subversion reviewed, and that the Government must ease the restrictive media laws.

A Habibie aide denied the Parliament would move against the new President by calling a special session.

"The people will give him a chance," he said. "The military is professional and will respect the Constitution."

An Indonesian specialist, Mr Adam Schwarz, said the handover was "a fairly small accomplishment".

"Soeharto is gone but nothing else is resolved," he said.

"Habibie has to prove he can bring in something more. I am not convinced he will do that."