m has been Kaunda and the decision to set him free will improve the country‘s image,“ a Western diplomat told Reuters. He said that „the Kaunda problem“ had isolated Zambia because of his close personal connections with regional leaders. The 74-year old former president was arrested on Christmas Day (December 25) in connection with a failed coup by junior army officers last October. Kaunda walked free on Monday after the government withdrew charges against him. Kaunda led Zambia to independence from Britain in 1964 and ruled for 27 years, until he was defeated by President Frederick Chiluba in multi-party elections in 1991. After Kaunda‘s arrest, furious donors cut aid to Zambia and the squeeze threatened to derail Chiluba‘s free market economic policies, including one of Africa‘s most radical privatisation programmes. Donors underwrite up to $800 million in annual aid flows to the copper-based economy. Kaunda on Tuesday started consultations with members of his United National Independence Party (UNIP) on whether he should remain active in politics. „Consultations have started on what should be the role of the old man (Kaunda) and what the party should do now,“ a senior UNIP official told Reuters. Political analysts and Western diplomats said Kaunda‘s departure from the political arena would allow Chiluba to embrace him as father of the nation. Other party officials said Kaunda‘s family wanted him to retire from active politics and concentrate on his peace foundation. South African President Nelson Mandela, widely speculated to be behind a deal to free Kaunda, said on Tuesday that Kaunda had not undertaken to quit politics in return for his freedom. Speaking to reporters in Cape Town after meeting Malawian President Bakili Muluzi, Mandela said he understood that an arrangement may be worked out to allow Kaunda to retire gracefully. „President Chiluba has plans…which will make it unnecessary for him (Kaunda) to continue in politics,“ Mandela said.