John Aglionby, Dili – Xanana Gusmao, East Timor president, on Thursday accused the ruling Fretilin party of corruption, arrogance and mismanagement that had put the fledgling country on a path of violence and economic stagnation since its 2002 independence.

In an interview with the Financial Times, Mr Gusmao, whose job is largely ceremonial, said the young country's governing elite had built a record that compared unfavourably even with Indonesia's brutal 24-year rule, which came to a bloody end in 1999 following a United Nations-sponsored referendum.

Indonesia used to kill and lie but the economy continued to function," Mr Gusmao said. "Now we're independent it doesn't any more. Now the roads aren't repaired. The schools are rehabilitated but they're not done properly. Buildings are built for the ministries but the people are continuing to suffer."

The road near his house "has to be repaired twice a year, every year". "They fill a hole and then three months later it's bigger than it was before. How could that be if the government was doing its job properly?"

Mr Gusmao will step down from the presidency in May. His successor is due to be elected on April 9 with Jose Ramos-Horta, the country's Nobel laureate prime minister, seen as the favourite among eight candidates.

Mr Gusmao, who stepped down from Fretilin in the early 1980s, announced this week that he intended to join a new party that will oppose Fretilin in parliamentary elections later this year.

He said his country would never recover if Fretilin's current leadership retained power. "[Fretilin] is rotten down to its hands, which are always demanding money, and its mouth, which is always just saying: 'Yes sir, yes ma'am,'?" he said. "Its heart and its body are still healthy though."

The former guerilla leader said a UN mission that arrived after a massive breakdown of law and order last year should not be needed past mid-2008 if the East Timorese could settle their differences.

Mari Alkatiri, the Fretilin leader, was forced to resign as prime minister last August after an upsurge in violence left at least 37 people dead, forced 150,000 to flee their homes and triggered the collapse of the police and much of the military.

Mr Alkatiri dismissed Mr Gusmao and his new party, the Council for East Timorese Reconstruction, as "a pack of liars". He accused them of fomenting the violence that led to his forced resignation.