MANAGUA, Nicaragua - Nicaraguan President Enrique Bolanos said on Monday he was willing to make a deal with his predecessor, who faces graft charges, but refused to back off his corruption probe, despite warnings the investigation could destabilize the Central American nation. "I will talk to anyone and reach a deal for the benefit of Nicaraguans," Bolanos told a news conference. "I will not reach a deal to hang up my gloves in the battle against corruption."

Bolanos has led an anti-corruption campaign since taking over from former president Arnoldo Aleman in January, resulting in fraud charges against Aleman and the arrest of several of Aleman's former aides. Bolanos was Aleman's vice-president.

The anti-graft drive has split the ruling Liberal Party, with Bolanos' supporters eager to oust Aleman as party president and Aleman's followers denouncing his opponents as "traitors, Reuters reported.

Aleman, charged in a $1.5 million embezzlement scandal involving a state television station, warned over the weekend of difficult times ahead if a deal was not reached.

At a rally on Sunday, Aleman said the country's leaders needed to strike a "political deal" because Nicaragua was facing what he described as political and economic meltdown similar to that suffered by Argentina, which is mired in a four-year recession.

Aleman said the current government was incapable of resolving Nicaragua's problems and warned this could prompt the authorities to freeze bank deposits, as happened in Argentina.

"We will tell the inept and incapable people how a nation should be governed," Aleman said.

Bolanos accused his predecessor of trying to create panic and cause a run on private banks. "What we are inept at is in pillaging, in robbing," he said.

Aleman heads the National Assembly and has immunity from prosecution as a member of the legislature.

Bolanos has asked the National Assembly to lift Aleman's immunity.