Deadline looms for Fiji's Pacific suspension

SUVA (Reuters) - Fiji's military government was under pressure to announce democratic elections on Thursday as a midnight deadline loomed for the country's suspension from the 16-nation Pacific Islands Forum.

Australia and Pacific nations expect an angry reaction from coup leader and military chief Frank Bainimarama if he fails to call an election and the troubled island nation is expelled from the region's biggest grouping.

"Fiji will be suspended from the Forum on May 1 because the Fiji interim government has refused to meet the reasonable deadlines and conditions determined by the leaders of all Pacific countries," a spokesman for Australia's Foreign Affairs Department told Reuters, adding suspension was automatic.

Fiji was plunged into fresh political crisis this month after the president reappointed Bainimarama as interim prime minister, less than two days after a court ruled his 2006 coup and subsequent government was illegal.

Bainimarama, who has ruled out elections until 2012 after earlier promising a poll this year, immediately imposed emergency restrictions, including sending troops and police into media and government offices to gag opposition to his reform plans.

Fiji's suspension could splinter the Forum, whose smaller island nations have a history of non-interference in each others affairs in a brand of diplomacy dubbed the "Pacific Way."

Bainimarama may react by expelling harsh regime critic Australia's top diplomat, closing the Fiji-based Forum secretariat and revoking the diplomatic immunity of its chairman, Niue Prime Minister Toke Talagi.

Australia's Prime Minister Kevin Rudd and his Papua New Guinea counterpart Michael Somare on Tuesday said they could not accept within the Pacific Islands Forum, or the Commonwealth of former British colonies, a military government like Fiji's.

Rudd said he expected Fiji to be suspended from the Commonwealth at a meeting on May 15.

The UN has already barred Fijian soldiers from future peacekeeping missions, which provide a lucrative source of income for the military with around 2,000 troops on blue helmet duties in the Sinai, Iraq and Sudan.

Fiji's interim attorney-general Aiyaz Sayed-Khaiyum said he did not expect his country would be removed from the forum, as Bainimarama had been informing forum members on recent developments in Fiji.

"The prime minister's office has been busy dealing with this and I don't think that Fiji will be excluded from the PIF activities," he told the news website FijiLive.

An angry reaction by the strongman could further harm investment and the tourism-reliant economy, driving away international visitors as the region's major powers Australia and New Zealand threatened tougher sanctions.

Credit agency Standard & Poor's this month cut Fiji's long-term rating credit rating to B minus from B, and its short-term rating to C from B, due to "Fiji's deteriorating political environment."

The central bank devalued the local dollar by 20 percent to boost tourism badly damaged by successive coups.

Fiji, a former British colony, has suffered four coups and a military mutiny since 1987, fueled by tensions between indigenous Fijians and economically powerful ethnic Indians.

(Writing by Rob Taylor; Editing by Sanjeev Miglani)