* Bodies to lead transition in place, led by opposition
* US, Canada want polls by end of 2010
* Food crisis looms as million to go hungry
By David Lewis
DAKAR, April 15 (Reuters) - Niger’s military rulers have taken tentative steps towards restoring civilian rule and meeting a donor-imposed deadline of polls by year-end, but the process risks being derailed by a daunting food crisis.
A Feb. 18 military operation to oust President Mamadou Tandja, internationally criticised for overstaying his term in office, has been followed by two months of slow progress in consolidating political stability in the uranium-exporter.
"From afar, yes, things are on course. We are in a different position than in Guinea. There is much more faith in the institutions to deliver," said one Western diplomat, comparing similar efforts in Guinea to restore civilian rule.
"(But) I think they will have their hands full with the food crisis," the diplomat added, referring to a looming food problem that aid workers fear could be the nation’s worst in five years.
The junta has openly talked of impending famine, in contrast to Tandja who dismissed suggestions of a growing hunger problem in 2005 until media attention pushed him to acknowledge it.
This has helped cooperation between the government and aid workers, who warn that some 7.8 million people -- nearly 60 percent of the country’s population -- are running out of food after erratic rainfall last year caused crops to fail.
But the authorities will have to juggle feeding people with the lengthy process of bringing together Nigeriens to agree on a road map towards civilian rule, which must include a referendum on a new constitution and before elections can take place.
RETURN FROM EXILE
There have already been grumblings in the local media about the slow pace of transition.
Yet the process has recently been boosted by the return from exile of two key opposition leaders and the naming of two anti-Tandja figures as heads of the two main bodies involved in the transition.
Leading human rights advocate Morou Amadou has been named as the president of the Consultative Council, a 131-strong body that will give advice on everything from election dates and establishing the election commission to cleaning up politics.
Fatouma Bazai, the former head of Niger’s top court, which was dissolved when it challenged Tandja’s successful bid to extend his rule last year, now presides over the Constitutional Council which will give the final word on election results.
"If you take things at face value, you have a situation that is more politically inclusive than during the last six months under Tandja," said Tom Wilson, an analyst at Control Risks.
The coup was largely popular in the poor desert nation, where many have welcomed the soldiers’ vows to clean up politics and business, as well as hold elections at some stage.
Tandja had broken French nuclear giant Areva’s monopoly on uranium mining, opening up the sector to investors from other nations. But anti-corruption activists allege irregularities in many of the contracts signed.
While few believe the military will challenge multi-billion dollar deals with Areva or Chinese oil and mining firms, Control Risks’ Wilson said there was a need to clean up the investment environment -- while warning such a move risked opening up a can of worms and leading to a delay in the transition.
Donors are nervous about any such slippage and, without any set timetable for polls, the United States and Canada earlier this month put forward their own.
"We strongly encourage the holding of transparent, free, and fair elections this year so that the most important voice, the voice of the people of Niger, can be heard," they said in a joint statement.
Analysts believe the speedy release by the junta of Tandja supporters arrested on accusations of stirring trouble last month is a sign the soldiers do not want to be seen abusing their powers.
Moreover Niger’s reliance on foreign aid is something which could persuade the junta to step up the pace of the transition, with the possibility of Western donors rewarding positive steps.
While humanitarian aid continues to flow, donors cut most development assistance in protest at Tandja’s changing of the constitution to extend his term limit last year.
Donors account for about 40 percent of Niger’s 700 billion CFA franc ($1.46 billion) budget, though diplomats say exact figures were difficult to come by under Tandja’s rule due to off-budget spending.
"As the transition goes on, cash-flow pressures are going to tell. How flexible will the donors be?" said Paul Melly, an independent analyst of West Africa’s CFA franc zone.
"If the military comes up with a credible road map towards restoring democracy ... if the timetable is not very long, I would think that it is quite likely that the French will push for some flexibility and other EU countries won’t complain too much," he added. (Additional reporting by Abdoulaye Massalatchi; Editing by Giles Elgood)