The Kenyan peace talks are in tatters after it was discovered that Kofi Annan's hotel room in Nairobi has been bugged.

Independent Newspapers has learnt from multiple reliable, impartial sources - both in Kenya and abroad - that the former UN Secretary General's business and personal conversations were being intercepted during the ongoing negotiations after a thorough search was carried out on his Serena Hotel room on Tuesday evening.

For how long the room has been planted or by whom is unclear. "Kofi's security aides found the device yesterday," one source explained, while the talks were in session. Annan is said to be "livid", but it is not yet known how he intends to act on Tuesday night's revelations or whether he will walk away from the already troubled negotiations. Annan arrived in the Kenyan capital on January 15 on an African Union (AU) invitation to head up the talks around Mwai Kibaki's disputed election victory. He was joined by Graca Machel and the former Tanzanian President Benjamin Mkapa, under the banner of the Panel of Prominent African Personalities.

Together they brought members of both sides of the political divide to the table at the Serena Hotel, where Annan was also staying. Athough a breakthrough had been announced last Friday, when a four-point framework was agreed upon to curb the violence and address the December 27 poll, Kibaki and opposition leader Raila Odinga continued to wage a war of words on the sidelines. News of the bugging comes just 24 hours after Cyril Ramaphosa withdrew as the intended chief negotiator when the government of Kibaki made it be known that they would not trust the South African's intervention.

Ramaphosa was not the first South African to receive his walking papers. Nobel laureate Desmond Tutu's efforts to broker a deal last month were also met with a luke-warm reaction. Meanwhile, more than 1 000 lives have been lost, some 300 000 people are internally displaced and billions of shillings worth of damage has been carried out on properties and businesses throughout the country, home to the third largest UN headquarters in the world.

Machel is due to arrive in Nairobi on Wednesday after a brief trip home to Johannesburg. Meanwhile, Fresh violence in western Kenya on Wednesday left 12 dead, nine of whom were shot by police cracking down on gangs of youths who have attacked houses and other property, police sources said.Weeks of turmoil have delivered a major blow to Kenya's tourism industry, the top foreign currency earner, while tea production and agriculture have also been hard hit. About 300 business leaders issued a statement supporting Annan's mediation effort and warned that the economy faced a meltdown if the crisis was not resolved quickly.

Uganda, Sudan, Djibouti, Ethiopia and Somalia decided to dispatch their foreign ministers to Nairobi today to show support for "government efforts to restore stability".Annan has set a deadline of seven to 15 days to resolve the crisis.