Zimbabwe's Prime Minister Morgan Tsvangirai on Friday suspended cooperation with President Robert Mugabe's "dishonest and unreliable" camp in the biggest threat to the fragile new unity government.

The snub was sparked by this week's renewed detention of top aide Roy Bennett which Tsvangirai said drove home the "fiction of the credibility and integrity" of his partnership with long-time rival Mugabe.

Bennett, whose release on bail was ordered by the Zimbabwe high court on Friday, goes on trial for terrorism on Monday on charges the Movement for Democratic Change (MDC) says are trumped-up.

"It has brought home the reality that as a movement we have an unreliable and unrepentant partner in the transitional government," Tsvangirai told journalists in Harare of his ministerial pick's arrest and detention.

"Whilst being in government, we shall forthwith disengage from ZANU-PF and in particular from cabinet and the council of ministers until such time as confidence and respect is restored amongst us."

Lawyers were on Friday organising Bennett's release from detention in the eastern town Mutare after Justice Charles Hungwe dismissed an immediate appeal by the state against his ruling that he be freed on bail.

"In my view the applicant stands to lose more by absconding trial. He has not soiled his previous record, therefore he is entitled to an order that he seeks," Hungwe ruled.

Tsvangirai scrapped a ministerial meeting on Thursday a day after a magistrate's court revoked Bennett's bail and ordered him to stand trial, in a move which drew sharp criticism from Western powers.

The feisty white former coffee farmer, whose land was expropriated under Mugabe's land reforms, was originally arrested an hour ahead of the swearing in of the new government on February 13.

His case has become a symbol of the unresolved challenges facing the partnership which include claims of a crackdown against Tsvangirai's supporters and disputes over key posts.

The MDC did not comment on the implications of Bennett's release but Finance Minister Tendai Biti, a top party official, said: "Justice has prevailed. We have an attorney general mascarading as a lawyer for a long time."

Tsvangirai earlier told journalists that the MDC will not resume unity government ties until all outstanding issues are resolved and the power-sharing pact is fully put in place.

"Should this constitutional crisis escalate, then the self-evident solution would be the holding of a free and fair election" to be conducted by African political blocs under United Nations supervision, he said.

While suspending relations with ZANU-PF, the MDC leader said his party would remain in government as it was the "only one with the mandate to remain".

"For that reason this party for now will not renege on the people's mandate. However it is our right to disengage from a dishonest and unreliable partner," he said.

Tsvangirai and his long-time rival agreed to the unity government nearly a year after disputed polls, which saw Mugabe handed the presidency in a one-man run-off, plunged the country into deeper economic and political crisis.

Bennett's detention ahead of his trial next week also prompted sharp criticism from Western powers, which called for an end to what they said was harassment of Tsvangirai's supporters.

Washington on Thursday demanded Mugabe "end the harassment" of the former opposition, including Bennett, while the European Union presidency called the court's decision an act of "politically motivated abuse".