PRESIDENT Jacob Zuma suffered a setback at the African National Congress (ANC) policy conference yesterday when delegates shot down the "second transition" policy concept, which he has championed as a solution to poverty and unemployment.

The rejection of the concept - debate on which is regarded as a proxy for the ANC's leadership battle - will embolden members and leaders campaigning to replace Mr Zuma at the party's elective conference in December.

ANC delegates attending the conference in Midrand said the concept was rejected by "virtually all the commissions" for being theoretically poor.

One of 11 commissions studying policy proposals, and attended by Mr Zuma himself, concluded that "while the reasons behind reference to a second transition were understandable, the concept is inappropriate, and does not convey the movement's theorisation of the process of social transformation", according to notes seen by Business Day last night.

The commission said the ANC should not create an "artificial separation between social and political tasks".

"The commission strongly believes that the original transition should be directed towards attainment of all Freedom Charter objectives. There can never be a second transition because the aims and objectives of the first transition as captured in the Freedom Charter have not been achieved."

According to the document, over the past 18 years the ANC had ushered SA through a first transition to democracy, when it focused on political emancipation.

Now it needed to introduce a "second transition" directed at social and economic transformation over the next 30 to 50 years.

The second transition should achieve "rising per capita income, full employment, a Gini index target that demonstrates real and visible progress in reducing wealth and income inequalities, and visible progress in changing racial and patriarchal patterns of wealth and income", the document proposes.

Several senior ANC leaders have argued that the new document tries to separate the political and economic struggles - which contradicts the ANC's historic approach to the struggle for freedom. Others see it as a way to sneak socialist programmes into the work of the government.

The commissions will report back to a plenary session today where the 3000 delegates will debate a range of policy proposals. The plenary will determine the future of the document, and what can be done to improve it.

Some delegates want it abandoned altogether and replaced with a document adopted at previous ANC conferences.

Among its detractors are union leaders Zwelinzima Vavi and Irvin Jim. ANC deputy president Kgalema Motlanthe has already dismissed the document as a rallying point.

Mr Zuma will be relying on the plenary session to rescue the document, which critics claim is his manifesto for his campaign for a second term as ANC president.

It is possible that Mr Zuma's supporters could concede at the plenary that the term "second transition" should be dropped.

KwaZulu-Natal, Free State and Mpumalanga delegates were the main defenders of the document in commission discussions yesterday, while Gauteng, Limpopo and the Eastern Cape demolished the concept for being "scientifically poor", said a delegate.

If the document is rejected outright, those wanting a change in leadership in December will be buoyed. They may accept a change to the term "second transition", as that would be enough to signal Mr Zuma can be challenged.

While the ANC has put a lid on its succession debate, the policy conference is expected to provide clues on which way the leadership race will unfold.

The rejection of the second transition will be a huge setback for Mr Zuma, especially after he had endorsed it during his opening address to the conference on Tuesday. He received a mixed reaction and the delegates were mostly guarded.

However, at a press conference on Monday, he said the document should not be attributed to him, because he had not authored it.

A conference delegate, who wants leadership change in December, said the second transition concept was regarded as Mr Zuma's campaign tool. If accepted by the conference and sent to the party's elective conference in December for adoption, it would give Mr Zuma a point around which to rally support.

Additional reporting by Karl Gernetzky