HARARE (Reuters) - Diamond sales from Zimbabwe's Marange fields will resume by September after an agreement with the Kimberley Process, which monitors trade in the gems, the World Diamond Council (WDC) said.

The announcement, made at the end of an annual WDC meeting in Russia on Thursday, ends a stand-off between the southern African country and regulator Kimberley Process and rights groups which accuse the army of rights abuses at Marange.

Zimbabwe says it holds a stockpile of over 4 million carats of Marange diamonds worth an estimated $1.7 billion, almost as much as its 2010 budget. The government hopes the move will boost the struggling economy and attract donor aid.

"The World Diamond Council wrapped up its...meeting in St. Petersburg, with the welcome announcement that the Kimberley Process had reached consensus on an agreement that will enable the renewal of rough diamond exports from the Marange diamond fields in Zimbabwe," a WDC statement seen by Reuters on Friday said.

The Kimberley Process is mandated to certify all rough diamond trades in an international pact aimed at stopping the use of the precious stones to fuel conflict.

Zimbabwe would be able to start gem sales by September under the supervision of the Kimberley Process, the WDC said.

JOHANNESBURG (Sapa) - Media reports linking Zimbabwean businessman Ken Sharpe to a Russian spy ring uncovered in the United States contained "factual inaccuracies and damaging innuendo", he said on Thursday.

He was considering taking legal action over the "defamatory" reports concerning his business interests and his contacts with Alex Chapman and his ex-wife Anna, an alleged Russian spy

"I have no business links to Russia nor to the Chapman's. I have never done business in Russia nor exported vodka bottles to Russia. The closest I have been to doing business in Russia is in the Ukraine," he said.

"I do however own 30 percent of West Bev in Zimbabwe which produces, amongst other beverages, vodka but our sales are limited to Zimbabwe and I have never done exports of any products to Russia."

Britain's The Daily Mail reported that Alex Chapman was questioned by an MI5 agent about his ex-wife's links to Sharpe.

The newspaper reported that Anna Chapman had worked with Sharpe at a British company based in a London flat she shared with her then-husband Alex Chapman.

According to The Daily Mail, while Anna Chapman was at the company, Southern Union, she moved millions of pounds - possibly connected to money-laundering -- between Britain and Zimbabwe.

Zimbabwe's Prime Minister Morgan Tsvangirai axed ministers from his Movement for Democratic Change (MDC) party from the Cabinet on Wednesday but retained his Finance Minister in a reshuffle that was not expected to have a major influence on policy.

The reshuffle was mostly to re-organise Tsvangirai's MDC party ahead of future elections, which are expected once a new constitution is adopted.

Tsvangirai formed a unity government with President Robert Mugabe last year, but while the fragile coalition has stemmed an economic collapse, political reforms have been slow and the West has withheld aid needed to help fix the shattered economy due to corruption fears.

Many Zimbabweans hope the new constitution, replacing one drafted in 1979 before independence from Britain, will strengthen the parliament, curtail the President's powers and guarantee civil, political and media reforms.

Two ministers and deputies were dropped in the reshuffle, including the minister of energy and power development who oversees the supply of electricity.

Tsvangirai promoted MDC deputy secretary-general Tapiwa Mashakada to the economic planning and investment ministry and reshuffled five other posts.

The civil rights initiative AfriForum today demanded in a lawyer's letter sent to the Department of Trade and Industry, that the South African Government should intervene urgently to protect the lives and property of South African citizens in Zimbabwe.  This follows after South Africans farming in Zimbabwe, are once again being subjected to a renewed and intensified onslaught, starting this past weekend.  AfriForum is also currently obtaining legal advice regarding possible action against the Government, if such protection were not to materialise.

The demand is based, amongst other reasons, on the settlement reached between AfriForum and the South African Government on the BIPPA trade and investment agreement, formalised as a court order by the North Gauteng High Court in November 2009, in which the South African Government undertakes to maintain the rights and legal remedies of victims of Zimbabwe's illegal land expropriation programme.  In terms of the Minister's affidavits for the court case, as well as the ensuing court order, South African citizens have a right to protection as described by this investment agreement.

According to Kallie Kriel, CEO of AfriForum, the lawyer's letter has been sent to the government, because the state has not taken any steps to assist citizens, even after it had come to light that South Africans are now subject to a renewed onslaught.  The latest incidents include that: