MANILA : Philippine President Gloria Arroyo has scrapped a government peace panel negotiating an end to a deadly and drawnout Muslim rebellion in the nation's south, officials said Wednesday.

Arroyo spokesman Jesus Dureza confirmed the decision but declined to give details, saying an official announcement would be made later Wednesday.

The decision throws into question the future of a five-year-old ceasefire between the rebel Moro Islamic Liberation Front (MILF) and the government.

The move also signals a dramatic change in Arroyo's long-standing policy of continuing with the peace process with the MILF in a bid to end their rebellion before her term expires in 2010.

About five percent of Filipinos are Muslim, making them the largest minority in the mainly Roman Catholic nation, whose military has been battling separatists in the southern Mindanao region for most of the past four decades.

The scrapping of the panel came amid a large military offensive targeting two MILF commanders, Umbra Kato and Abdurahaman Macapaar, who launched a string of deadly raids on mostly Christian towns in Mindanao this month.

Macapaar and Kato said their attacks were in retaliation for a Supreme Court order stopping a deal agreed with the government and intended to give the MILF control over an expanded autonomous region in the south.

The raids left nearly 50 civilians and soldiers dead, while succeeding military offensives have so far killed more than 100 MILF rebels and led to the capture of more than a dozen rebel camps.

Mohagher Iqbal, the MILF's chief peace negotiator, said Arroyo's move signalled the government was preparing to intensify its military attacks to include the entire rebel force and not just the two commanders.

"I don't want to imagine that happening, but the MILF is prepared for any offensive," Iqbal told AFP. "We have to invoke our right to self defence."

He said the MILF leadership has not been officially informed of Arroyo's decision through Malaysia, which has been brokering the peace talks.

- AFP/vm