Biti's controlled outburst came during a recent meeting of the cabinet committee on the budget, which Mugabe chairs. Government sources confirmed that Biti was in a no-nonsense mood after enduring a torrent of hate speech and vitriol from Mugabe who accused him of refusing to release government funds to pay civil servants, war veterans, army officers, the CIO and traditional chiefs. As a result of Mugabe's incitements, Zanu (PF) supporters stormed Biti's office threatening to assault him.

They also set off a bomb at his Chisipite home, after which Biti threatened to resign.

"Biti was quite upset that Mugabe had been piling all the blame on him for failing to increase civil service salaries and yet it's not a one-man decision. Cabinet has to agree and Mugabe is the chair of the budget committee," said a source.

Commenting on the developments to The Zimbabwean, Biti said: "I told Mugabe that the problem is we're just looking at expenditure and not income. The government is not spending what its killing. On the revenue side we're OK. The problem is on expenditure."

Biti said one of the biggest problems was Mugabe's endless foreign trips, accompanied by huge entourages of "useless" hangers-on. Biti said Mugabe and his party had accounted for the bulk of the $20 million spent by the government so far this year on foreign travel. He said the trend was continuing.

"I was in Luanda (for the SADC summit two weeks ago and I said how come the whole government was there," the Minister said.

Presenting his mid-term budget review in July, Biti disclosed that of the US$1.14 billion spent by the government up to the end of June, 63 per cent had gone to salaries of state employees. By contrast only 4 per cent was put to social expenditure, resulting in a huge shortfall in assistance for desperate people in a country where more than 90 per cent of workers are unemployed.

Speaking at a press conference last week, Biti confirmed that 'ghost workers' still accounted for a significant chunk of the government payroll.