Zim govt workers paid US $

"We will pay every civil servant in foreign currency," Biti told a news conference in the capital, adding that the armed forces had been paid on Tuesday.

Biti, deputy leader of the Movement for Democratic Change which joined the unity government last week, said the move was an attempt to pay the country's 130 000 civil servants a decent wage.

Soldiers were paid a $100 dollar allowance - worth more than current salaries - this week and payments to workers in other public sectors in the crisis-hit country will follow.

"Today it's the teachers and the rest tomorrow," Biti said, with the new government having to "juggle" resources to make the payments.

Zimbabwe's political and economic crises has reduced the Zim dollar, once on a par with the British pound, to almost nothing, forcing Zimbabweans to pay trillions of local dollars just for a loaf of bread.

The central bank earlier this month knocked 12 zeros off the local currency - reducing one trillion dollars to one dollar - in an effort to get the unit back on track to normality.

Since last year, civil servants such as teachers, nurses and doctors have downed tools demanding that they paid in hard currency.

Last week, newly installed Prime Minister Morgan Tsvangirai announced that civil servants would be paid in foreign currency and appealed for them to return to work.

"We have to get Zimbabwe working again; getting teachers to school is part of efforts to get Zimbabwe to work again, having examination papers being marked is part of having Zimbabwe work again," Biti said.

The dollar allowance is the first concrete step from the new unity government toward rebuilding Zimbabwe after President Robert Mugabe swore in a new cabinet last week following a decade of stunning economic collapse.