The Mexican government, accusing Cuba of meddling in its internal affairs, gave the country's ambassador his walking papers and said it will call its own ambassador back home immediately.
The surprise action, jointly announced late Sunday by Foreign Secretary Luis Ernesto Derbez and Interior Secretary Santiago Creel, stopped short of cutting off diplomatic relations altogether, but reduced the relationship to the level of charges d'affaires.
Cuban officials had no immediate reaction, but the Mexican government's decision underscored the extent to which bilateral relations have deteriorated since Mexican President Vicente Fox took office in 2000.
Derbez said Mexico hoped to restore normal diplomatic ties "when the conditions of friendship and respect that should characterize relations between nations are rebuilt."
The Cabinet members said three incidents led Mexico to its decision: recent remarks that Cuban President Fidel Castro made regarding Mexico's foreign policy decisions; comments by Cuban Foreign Minister Felipe Perez Roque about an ongoing political scandal in Mexico; and unauthorized activities carried out by visiting Cuban Communist Party members who failed to notify Mexican officials of their presence.
"The statements of the foreign minister ... the speech of President Castro on May 1, 2004, and actions taken by functionaries ... lead Mexico to conclude that the attitude of the Cuban government has been to meddle directly in internal affairs that are the exclusive domain" of Mexico, Derbez said.
"We want to make clear that Mexico does not and will not tolerate, under any premise or circumstances, the attempt of any foreign government to influence our domestic or foreign policy decisions."
Mexico-Cuba relations first started slipping when Fox, who took office in 2000, named as his first foreign secretary Jorge Castaneda, a former leftist academic who criticized Cuba's human rights record.
Cuba embarrassed and infuriated Fox in 2002 by releasing a clandestine tape recording of the Mexican leader trying to persuade Castro to leave a summit meeting before the arrival of US President George W. Bush.
One source of contention has been Mexico's vote in the past several years in favor of a resolution criticizing Cuba's human rights record at the UN Human Rights Commission in Geneva.
Castro severely criticized that stance in his May Day speech Saturday, saying that the prestige Mexico once gained in Latin America and throughout the world for its foreign policies had "turned to ashes" as it began toeing the line for the US.
Derbez indicated that Castro's remarks were unacceptable. Creel, meanwhile, said one of the reasons Fox decided to scale back diplomatic relations was because Cuban Communist Party members entered the country on diplomatic passports last month without advising Mexican officials.
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