MANILA (AFP) - Philippine President Gloria Arroyo scrapped Wednesday a government peace panel seeking to end a deadly and drawnout Muslim uprising in the south, officials said, in a major shift in policy. The move threatens the future of a five-year-old ceasefire between the government and the Moro Islamic Liberation Front (MILF), which has been fighting for an independent Islamic state for most of the past four decades. The move signals a dramatic change in Arroyo's long-standing policy of continuing a peace process with the 12,000-strong MILF in a bid to end their struggle before her presidential term expires in 2010. Arroyo's chief aide, Executive Secretary Eduardo Ermita, said that from now on any negotiations with armed groups would only proceed if they disarmed and move out of their camps. "Consequently, the president has ordered that government peace panel for talks with the Moro Islamic Liberation Front be dissolved to align all the peace initiatives in accordance with this directive," Ermita told reporters. In a separate statement, Arroyo also said her government would no longer sign a controversial draft agreement that would have given the MILF autonomy over their own Muslim homeland. "In the light of the recent violent incidents committed by lawless violent groups, the government will no longer sign the agreement," she said. "There will be no peace gained through violence, no peace agreement can and will be reached through intimidation or the barrel of a gun," she said. Military spokesman Lt-Col Ernesto Torres said that the military was still pressing its hunt for Kato and Macapaar and their followers but that the main body of the MILF was still covered by the ceasefire. Asked if the military was ready for a wider war with the entire MILF, Torres said: "We are prepared to address any eventuality. Troops are there on the ground, we are war-gaming all possible scenarios and we are prepared to address whatever threats that may come out." Mohagher Iqbal, the MILF's chief peace negotiator, said Arroyo's move signalled the government was preparing to intensify its military attacks to include the entire rebel force and not just the two commanders. "I don't want to imagine that happening, but the MILF is prepared for any offensive," Iqbal told AFP. "We have to invoke our right to self-defence." He said the MILF leadership has not been officially informed of Arroyo's decision through Malaysia, which has been brokering the peace talks. Arroyo said the peace process would only move forward after the government widens its consultations to include local executives in areas to be covered by the new autonomous region. On Wednesday, she said offensives would continue against the MILF, but that troops were directed to respect Muslim civilians during Ramadan. She ordered relief agencies to also step up their efforts to bring food and aid to the affected areas amid a looming humanitarian crisis.