More than three decades after the breakaway Republic of Biafra suffered a bloody defeat at the hands of federal forces, shoppers are once again spending Biafran pounds and shillings in the markets of southeastern Nigeria.

In the latest sign of the forces threatening to tear Africa's largest oil exporter apart, ethnic Igbo rebel leaders have reintroduced the bills, which are identical to those minted during a doomed struggle for independence.

They now circulate widely in the east's bustling street markets and have partially displaced the Nigerian naira, the national currency and a hated symbol of central rule.

Violence, disease and starvation killed more than a million Nigerians during the country's 1967-1970 civil war. Most of the dead were Igbos from the territory claimed as Biafra by rebel forces - and many from the region still cling to dreams of full independence.

Separatist leaders say they will not now take up arms against the Nigerian state. Instead, they plan to edge their homeland into freedom through a 25-step program of gradual autonomy. One of the first such steps was the reintroduction of the pound, which has proved popular.

``I cannot accept Nigerian naira because I am a Biafran,'' declared Ogbonnaya Udeh, 22, who trades in textiles at the market in Owerri, a key agriculture center in the heart of Igboland. ``Besides, the naira is as worthless as toilet paper. This is Biafran land and I have to abide by the laws of this new republic.''

It is a common refrain in the market.

``I have renounced my Nigerian citizenship,'' said Cyprian Onyejekwe, an Igbo who said he became a trader after losing a place in law school to a rival from another ethnic group who had lower test scores. ``I am a Biafran in everything - mind, body and soul.

``I will have nothing to do with Nigeria again. The naira has become a taboo to an Igbo man. It is a sacrilege to touch it here because anything Nigerian is evil.''

Over the weekend in Owerri and Onitsha, the most downstream bridging point on the River Niger and home to West Africa's busiest market, pounds and shillings were changing hands between Igbo shoppers and traders and being sold by money changers at a rate of one pound to 270 naira.

At a Onitsha street rally organized by a banned separatist group, the Movement for the Actualization of a Sovereign State of Biafra, protesters brandished the notes alongside the rising-sun banner of the defunct republic.

``The naira ceased to be legal tender in Igboland in 1999 when MASSOB began the current struggle,'' the group's leader Ralph Uwazuruike said at his fortified compound in a forest village.

Uwazuruike said the pound notes now circulating in Onitsha and across Igboland were from stocks preserved after Biafra's defeat in 1970, and more could be printed as their use spreads.

``My people have come to terms with reality,'' he said. ``They know they are no longer Nigerians because they have realized they are not wanted.''

The mood in Igbo territory is being monitored by Nigeria's federal government and President Olusegun Obasanjo in particular. As a general, he fought against Biafra and accepted the surrender of rebel leader General Emeka Odumegwu-Ojukwu's forces.

Scores of MASSOB activists have been rounded up and some charged with treason. Rights groups have expressed concern that separatists have been killed or tortured by police and the feared State Security Service.

Nigeria is Africa's most populous country - estimates range from 130 million to 150 million people - and has more than 250 distinct ethnic and linguistic groups. With perhaps 40 million people, the Igbo are among the biggest, with the Hausa and the Yoruba.

Since independence from Britain in 1960, Nigeria has been hit time and again by regional uprisings, the most serious being in Biafra. Since the war, Igbos have complained about being marginalized by military regimes headed by Hausa and Yoruba generals.

The country's return to civilian rule in 1999 brought with it hopes of greater harmony. Instead, the removal of a military fist unleashed long-repressed demands for regional autonomy.

More than 20,000 people have been killed in ethnic, religious and political violence and many fear Nigeria - the world's No9 oil exporter and key to security in the region - could fall apart.AGENCE FRANCE-PRESSE