Susan Sim, Jakarta – Indonesia's top generals are laughing off a report in an international magazine which alleged that they had cut a deal to support opposition leader Megawati Soekarnoputri for the presidency.

Business Week, a New York-based magazine, had reported in its latest issue that at a "commanders call" early this month, military chief General Wiranto had obtained the support of certain top generals to put together a coalition government that would be led by Ms Megawati as President and himself as "the truly powerful Vice-President".

Of the incumbent's fate under this deal, the magazine said: "He's out at the end of his term. Wiranto, according to the sources, even secured the blessing of ex-President Suharto."

Asked about the report, TNI spokesman Brigadier-General Sudrajat told The Straits Times: "It is false ... misleading, baseless. We haven't discussed it internally, but at coffee this morning, everybody was just laughing at it."

The facts, he said, were wrong. The only "commanders call" – which involves all regional commanders and chiefs of the various departments and units – held recently was in early June, when Gen Wiranto reviewed security preparations for the election and issued reminders to his subordinates to remain politically neutral but stay alert to any sign of trouble.

The military chief, he said, did chair weekly routine meetings involving many of his generals, but the presidential contest had never been on the agenda.

"In fact, he's told us several times that if any of us were ever asked by whoever what his stand was regarding his nomination by certain groups to be President, we were to say that he was not paying any attention to it, but concentrating on his job of promoting peace and stability," he said, adding:

"That doesn't mean he has no interest in the presidency, only that he is not paying any attention to it now because the publicity will destroy his concentration on security matters."

Two sources in regular contact with Gen Wiranto said that whatever his inclinations, a key consideration would be President Habibie's reaction.

"He has to be very careful in dealing with Habibie, because Habibie can sack him," said one source. "If he has decided to back Megawati, you can be sure the Islamic groups would have heard of it by now and ... pressing for his removal."