· Package depends on proof Mugabe not still in control · Power over police and bank become key tests

About £1bn in western aid to revive Zimbabwe's economy will hang in the balance today as western donors watch to see how a power-sharing deal to be signed by President Robert Mugabe works in practice before committing a rescue package.

Under the deal with his arch-rival Morgan Tsvangirai, Mugabe is to surrender many of his powers for the first time in 28 years. But though the agreement, to be formally signed today, marks a huge climbdown by Mugabe, foreign donors indicated that they want to see just how much power Tsvangirai wields as the new prime minister in the coalition government.

"We want to see this government in action before we commit our support to it," said a European diplomat in Harare. "We need to see Mugabe is not continuing to run things. There will be benchmarks, litmus tests of who's really in charge."

Donors, including Britain, the EU and the US, are broadly agreed to inject about £1bn in aid over a year to reverse more than a decade of economic decline that has brought inflation above 20,000,000%, mass unemployment, empty supermarket shelves and forced about 4 million people to leave the country to find work.

Agriculture has collapsed, leaving millions without sufficient food and reducing many to one meal every other day.

Tsvangirai will be keen to see the foreign money as soon as possible in the hope of bolstering public support by swiftly moving to alleviate people's misery.

The power-sharing agreement brokered by the South African president, Thabo Mbeki, gives the opposition a majority of one in the cabinet and places Tsvangirai in charge of the daily administration of government.

When the 31 cabinet posts are divided in the coming days, Tsvangirai's Movement for Democratic Change is likely to win control of the finance ministry because Mugabe recognises the donors will not want to see a Zanu-PF minister in charge of their funds. But diplomats say that their governments will be looking for other signs that Tsvangirai is in control.

One test will be if the MDC gains authority over the police and if it is able to remove the highly partisan police commissioner, Augustine Chihuri, who said he would not salute Tsvangirai if he were elected president and whose force played an active part in the bloody assault on opposition supporters during the election.

Western donors are also keen to see the governor of the central bank, Gideon Gono, sacked because of his alleged role in the plunder of the country's hard currency reserves and fuelling inflation by furiously printing money.

Nonetheless it will be difficult for western countries to turn their back on today's watershed agreement because they risk being accused of failing to accept an African-mediated settlement. The evident hostility and suspicion with which Mugabe regards Tsvangirai and the expectations of western governments was evident in a column in the state-run Herald newspaper by the president's spokesman, George Chiramba, under a pseudonym. It called the MDC in government the "enemy within" and accused it of taking its orders from Britain and other powers.

"For a party that has always relied on government and intellect for policy incubation, [Zanu-PF] has to learn to govern in a new environment where the enemy is within, well embedded," Chiramba wrote. "The west will now have an eager listening post, right up to cabinet. There will be lots of policy pre-emption."

Many Zimbabweans are cautious about the political settlement. Lining up for bread in shops with otherwise bare shelves, or queuing for the pitiful 50p-worth of currency they are permitted to withdraw from the bank each day, people are desperate for reasons to hope.

However, men such as Arthur Mubaiwa, who was part of a very long queue for petrol yesterday, say they know Mugabe and they do not have full confidence in Tsvangirai.