South Africa's new Congress of the People party named former defence minister Mosiuoa Lekota as its leader on Tuesday and said it would stand against the ruling ANC on a pro-business platform.

COPE, founded two months ago by ANC defectors close to former South African President Thabo Mbeki, represents the biggest challenge to the African National Congress since it took power at the end of apartheid in 1994.

"The history of South Africa will never be the same," Lekota told two thousand cheering delegates as he accepted the party's top leadership post at a conference in Bloemfontein.

"We have taken this step because we are the party of the future."

Lekota, who resigned as a minister in September after the ANC ousted Mbeki, said the new party would launch its election campaign in mid-January. He said maintaining economic growth would be the linchpin of COPE's programme.

"We need to fight joblessness and grow our economy. Our approach is stability, hard work and growth."

The party also pledged to soften some of the government's more controversial policies, including affirmative action and land redistribution. "This will not be done on the basis of race," Lekota pledged.

COPE seeks to capitalise on anxiety among middle class voters and business over the growing influence of trade unions and communists in the ANC, which traditionally portrays itself as representative of all South Africans.

The left has thrown its support solidly behind the ANC and its leader, Jacob Zuma, and has demanded that the government abandon the conservative fiscal policies that have spurred nearly a decade of growth in Africa's largest economy.

Zuma defeated Mbeki for the ANC leadership a year ago and his supporters subsequently purged Mbeki officials at all levels.

BOESAK DEFECTS

The ANC leader has dismissed the COPE leadership as sore losers and declared the new party irrelevant.

"Only the ANC can deliver true unity and prosperity in this country," Zuma said in a speech at a rally in Bloemfontein.

But the ANC leadership has been concerned by the growing interest in COPE and by a wave of defections to the new party. Zuma has warned ANC members not to be seduced and some in the ruling party have suggested instituting loyalty oaths.

Allan Boesak, a prominent church leader and anti-apartheid activist who was later convicted of fraud and theft, announced at the COPE conference on Tuesday that he had left the ANC for the new party.

Lekota said that Boesak's role in the party was still being discussed. COPE named Mbhazima Shilowa, the pro-business former premier of Gauteng province, the nation's industrial heartland, and businesswoman Lynda Odendaal as Lekota's deputies.

COPE plans to contest the next general election, expected in March 2009.

Although it would be hard pressed to defeat the ANC, which has won about two-thirds of the vote in previous elections, it could gain enough black votes to deny it an absolute parliament majority.

There is also talk of COPE forming a coalition with other opposition parties, including the Democratic Alliance which has heavy support from whites.

Lekota and his deputies also hope to gain political mileage out of the corruption scandals that have dogged the ANC, especially Zuma. Mbeki was ousted by the ANC after it accused him of using a corruption case to smear Zuma politically.