Diplomat says jailed opposition leader will be allowed to organise her party for elections next year

Burma's opposition leader, Aung San Suu Kyi, may soon be released so she can play a role in next year's election, a senior Burmese diplomat has said.

"There is a plan to release her soon ... so she can organise her party," Min Lwin, a director-general in the foreign ministry, to ld the Associated Press. He gave no details and it was unclear whether Aung San Suu Kyi would be allowed to campaign or stand for election.

Despite the conciliatory remarks, the country's constitution includes provisions that bar her from holding office and ensure the primacy of the government in the military.

The Nobel peace prize winner has spent 14 of the last 20 years under house arrest. In August a court sentenced her to an additional 18 months after an American, John Yettaw, swam across a lake to her villa in Rangoon and stayed overnight.

Burma's junta in the the past has raised expectations of Aung San Suu Kyi's imminent release only to dash the hopes of her supporters at home and abroad.

Pro-democracy campaigners cautioned against reading too much into the latest hints on Suu Kyi's release. "They've been saying these sorts of things for a long time but they have never delivered on them," said Anna Roberts, the director of the Burma Campaign UK. "The regime's main concern is get economic sanctions lifted and get approval for the sham elections next year."

Tantalising hints of a possible release for the political prisoner came as Min Lwin was in Manila for a meeting of the Association of Southeast Asian Nations (Asean) and the US.

In a break with George Bush's policy of isolating the Burmese regime, Barack Obama has decided on a policy of engagment with the junta. Last week the US assistant secretary of state for east Asia, Kurt Campbell, and his deputy, Scott Marciel, became the most senior American officials to visit Burma since 1995, when Madeleine Albright went as Bill Clinton's ambassador to the UN.

Campbell and Marciel held exploratory talks with senior figures in the junta, including the prime minister, Thein Sein, but not Than Shwe, the general who has ruled the country for the last 17 years. They also met Aung San Suu Kyi.

Obama will meet Asean leaders this weekend during the Asia Pacific Economic Cooperation forum in Singapore, possibly bringing him into rare contact with Thein Sein. The last US president to meet a Burmese leader was Lyndon Johnson, who held talks with prime minister Ne Win in 1966.

Suu Kyi's National League for Democracy won Burma's last elections, in 1990, by a landslide but was blocked from power after the junta in place since a 1962 coup refused to recognise the result. Outside observers fear next year's election will be a sham to provide the veneer of credibility the regime has been looking for since 1990.