POLOKWANE, South Africa (Reuters) - South Africa's ruling ANC elected Jacob Zuma as its new leader on Tuesday, dumping President Thabo Mbeki and putting the populist politician on course to lead the country in 2009.
Zuma, an ethnic Zulu, is a darling of the ANC rank and file in contrast to the haughty and intellectual Mbeki. But uncertainty over his policies and his strong left-wing backing have caused jitters among many investors.
Because of the ANC's electoral dominance, Zuma's victory means he is almost certain to succeed Mbeki as president when the head of state has to step down in 2009.
Electoral officials said Zuma took 2,329 of 3,834 votes cast. Mbeki, bidding for his third term as ANC leader, won 1,505 votes.
Pro-Zuma delegates pumped their fists in the air, jumped on their chairs, cheered and sang after the result was announced. Zuma smiled as he took his place on a stage at the party conference and Mbeki hugged him before walking away.
Zuma, backed by the trade unions, went into the congress with huge momentum over Mbeki, who has become increasingly unpopular with the rank and file, who say he is autocratic and unapproachable and has moved too slowly to help millions of poor blacks.
Mbeki took control of the party from Nelson Mandela in 1997, succeeding him as head of state in 1999 .
Markets fear Zuma could reverse Mbeki's centrist policies, which have fuelled the longest period of growth in Africa's economic powerhouse.
There are also concerns of a long period of uncertainty over the next 18 months until the 2009 election, with the presidency and party leadership split between two men and Zuma facing possible charges in a corruption case.
RIVALRY
Rivalry between Zuma and Mbeki opened the worst rifts in the history of the previously monolithic ANC, which has ruled almost unchallenged since apartheid ended in 1994.
The vote was delayed by two days of often chaotic wrangling between their supporters and unprecedented barracking of Mbeki and his ministers.
The rifts have dismayed veterans including Mandela and raised fears that continued infighting will divert the government's attention from a huge AIDS epidemic, widespread crime and poverty.
Despite investors' fears, Intelligence Minister Ronnie Kasrils on Tuesday denied that ANC policy was likely to change under Zuma, echoing statements by other officials.
"The economy is a very central issue. That is where there will be thorough discussion ... I would not see a (policy shift) but rather finding a way of delivering to the poor," he told reporters at the conference in the northern town of Polokwane.
Analysts say markets were prepared for a Zuma victory and not all investors share the view that he is a threat to prudent economic policies.
Some say more public spending, on healthcare, education and infrastructure, is vital to defuse dangerous resentment among the millions of blacks who remain in poverty under majority rule.
Although he must step down as South Africa's head of state in 2009, Mbeki wanted to retain control of the party to avoid becoming a lame duck and to influence the choice of his successor as president.
Zuma has tried to reassure investors there would be no sweeping economic policy changes under his leadership.
He has met businessmen overseas and toured poor villages at home on an American-style campaign trail, staging a remarkable comeback after a rape trial and graft allegations that would have buried most politicians.
He was acquitted in the rape trial but evidence, including his admission that he showered after sex with an HIV-positive family friend to avoid infection, tarnished his reputation.
