The government has scrapped a controversial deal which would grant Muslims in the country's south their own homeland, possibly pre-empting a Supreme Court ruling that parts of the deal were unconstitutional. Negotiations now look likely to head back to the drawing board after petitioners tried to block the deal in court, saying it would give a future government of the expanded Muslim homeland political and economic powers that were too wide and that would be unconstitutional. Separatist violence in the region this week that left at least 38 people dead has also cast a shadow over the stalled deal. Presidential spokesman Jesus Dureza said yesterday the Office of the Solicitor General had asked the Supreme Court to stop hearing the petitions. Solicitor General Agnes Devanadera conceded in a letter to the court this week that the Memorandum of Understanding for the proposed Muslim homeland 'in its present form, must undergo thorough review'. 'In fact the executive department will pursue further negotiations with the Moro Islamic Liberation Front (MILF) to address the issues hurled against the MOA ... [and consult] various stakeholders,' the chief government lawyer said. Some of the legal sticking points include granting a separate banking and monetary system in the south, and control over the region's vast natural resources. She said such steps were necessary because 'circumstances have changed' from the time of the intended signing of the document in Malaysia on August 5 last year. Those circumstances, she said, included the Supreme Court action and the outbreaks of fighting in Mindanao, led by disgruntled groups of the MILF. Supreme Court spokesman Midas Marquez said the judges would decide today whether to continue with the hearings. Franklin Drilon, chairman of the opposition Liberal Party and a former secretary of justice, who opposed the deal in court, said Ms Devanadera's letter was a ploy to stop the court from ruling on what could be a potentially embarrassing outcome for the government. 'At the end of the day, they may renegotiate but may come up with substantially the same terms consistent with the present MOA,' he said. 'Let's put it this way, you cannot remove any scenario, any option from the table.' Other officials close to President Gloria Macapagal-Arroyo have refused to use the word 'renegotiation' to describe the next step of the stalled deal. Presidential executive secretary Eduardo Ermita merely said the deal had 'flaws'. Her chief peace adviser, Hermogenes Esperon, said negotiations for a final peace agreement must continue, not be renegotiated. The MILF leadership earlier issued a statement saying that it was a 'done deal' and would not renegotiate. It also warned that if the government reneged on the deal, the rebels would be forced to resume armed struggle. Yesterday, however, MILF chairman Alhaj Murad Ebrahim signalled that he wanted his group to return to the negotiating table. This was after the authorities posted a 10 million peso reward for the capture of two of his most senior commanders, Abdurahman Macapaar, alias Bravo, and Ameril Umbra, alias Kato. Both were accused of ordering the recent atrocities in Lanao del Norte and North Cotabato provinces which included the shooting of a one-year-old girl, which they denied. He did not condemn the atrocities, and instead pleaded for understanding. He said cancelling the signing of the agreement had 'built up the outrage' among the rebels on the ground. 'There were so many delays in the negotiations.' He said the government's actions meant they were 'trying to renege on what had been agreed on already'.