Zelaya, centre, has sheltered at the Brazilian embassy in Tegucigalpa for the last two weeks [EPA]

"It is completely overturned," Micheletti said on Monday of the decree, which had imposed restrictions on freedom of movement, assembly and speech in the central American country since September 27.

Micheletti said hours earlier that he had moved to "totally annul" the decree because calm was returning to Honduras.

The lack of support among the international community for the decree was also a factor in overturning the order, he said.

OAS-led negotiations

Zelaya, who has been sheltering at the Brazilian embassy in the Honduran capital Tegucigalpa since he returned home two weeks ago, had called for Micheletti to rescind his decree before negotiations to tackle the political crisis begin.

A delegation of foreign ministers from member states of the Organisation of American States (OAS) is to broker talks between the de facto government and Zelaya on Wednesday.

A proposal by Oscar Arias, the president of Costa Rica, that Zelaya be reinstated before elections scheduled for November 29 is likely to form the basis of the OAS-brokered talks.

Embassy surrounded

Zelaya is blocked by the Honduran constitutuion from holding another presidential term, but Arias' proposal suggests that he resume the presidency until an elected successor takes office.

The ousted president has called on the de facto government to "immediately" sign the Arias proposal, but Micheletti has maintained his opposition to Zelaya re-taking power.

Honduran security forces are continuing to surround the Brazilian embassy compound, where Zelaya and about 60 aides have been holed up.

Zelaya was ousted from the presidency by a military-backed coup on June 28, the same day that he planned to hold a non-binding referendum on the constitution.

The military, courts and opposition politicians accused Zelaya of trying to extend presidential term limits via the referendum.

Zelaya said that the public vote was aimed at improving the lives of the poor in Honduras.

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