Tuesday's purge by hardliners within Rangoon's secretive military leadership has put junta strongman Than Shwe right back in the driving seat and lengthened already long odds on the release of democracy icon Aung San Suu Kyi, analysts said.

Indonesian Foreign Minister Hassan Wirajuda admitted that Jakarta now had "much less hope'' Nobel Peace laureate Suu Kyi would be freed from house arrest - a situation she has been in for much of the last 15 years.

"Than Shwe is not willing to give Suu Kyi the time of day, so I don't think there is much hope for change on that issue,'' said Bradley Babson, an ex-World Bank economist and Burma expert.

Her opposition National League for Democracy (NLD) won a landslide election victory in 1990 but was denied power by the army, which has run the country in various guises since 1962.

The removal of Khin Nyunt, 64, after just over a year as prime minister caused concern at the United Nations over the direction and pace of Burma's sluggish transition to multi-party rule.

It also begs much bigger questions closer to home, in particular inside the Association of South East Asian Nations (ASEAN), the 10-member regional grouping which has vainly embraced Burma to try and nurture more open government.

Europe and the United States have chosen the opposite tack, branding Burma an international pariah and hitting it with increasingly severe sanctions.

The absence of Khin Nyunt, seen as a relative reformist even though he was military intelligence chief and for years head of the secret police, is only likely to harden this stance.

"Khin Nyunt's ouster is a step back for reforms,'' said Abdul Razak Baginda, executive director of the Malaysian Strategic Research Centre, a think tank. "ASEAN should take the bold step of suspending or even expelling Burma. It's not going anywhere. It's becoming an embarrassment for ASEAN.''

The situation is made even more tricky for ASEAN since Myanmar is due to take over its rotating chair in 2006.

State television and radio said he had been "permitted to retire for health reasons'' - a euphemism used when the junta discards an unwanted general. The official New Light of Myanmar (Burma) newspaper reported his sacking in a single sentence.

He is to be replaced by Lieutenant General Soe Win, a conservative in his mid-50s said to be a trusted aide of Senior General Than Shwe.

Speculation had been rife of a widening rift between Than Shwe and Khin Nyunt, who had struggled since his appointment last year to implement the roadmap, which Western governments had already dismissed as a sham.

REUTERS