A bruised and battered Premier David Saul is fighting for his political life, high-ranking Government sources said yesterday.

They said his leadership was under siege from the group of Government dissidents dubbed "The People's Five''. And the ground was being paved for a challenge by two of the rebels -- Ann Cartwright DeCouto or C.V. (Jim) Woolridge.

Sources spoke after Dr. Saul endured the humiliation of being censured by the House of Assembly in the early hours of Saturday morning. Opposition MPs won the support of "The People's Five'' in pushing the censure motion through by 21 votes to 16.

It is the first time since the 1968 Constitution that a member of the House has been censured.

"I think the People's Five are out to embarrass and frustrate and effectively make it difficult for Dr. Saul to continue,'' said one Government source.

"They are holding the Country to ransom and really playing dice with Bermuda's future.'' This weekend Dr. Saul was considering his political options. In the immediate aftermath of Saturday's embarrassment, Dr. Saul was visibly upset.

He told The Royal Gazette : "Constitutionally the motion has no effect at all. I have checked with all the authorities on it. I can say that the outcome was no surprise because I think regardless of what I said the 21 members had already made up their minds.'' Asked what the political effect of the vote was -- and whether he would resign or discipline his party rebels -- he replied: "I will have to sit down with my colleagues and discuss what the ramifications will be. But I will do nothing on the spur of the moment. We will think precisely and carefully about the consequences of any action we may take.'' Dr. Saul said the censure motion bore no similarity to a vote of no confidence in the Government. "The vote was upsetting, but not surprising.'' The motion followed Government's controversial decision to approve a bid by Grape Bay -- whose principals include former Premier Sir John Swan and Government MP Maxwell Burgess -- to operate McDonald's restaurants in Bermuda.

On Saturday morning, the five United Bermuda Party rebels Mr. Woolridge, Dr.

Clarence Terceira, Mrs. Cartwright DeCouto, Dr. David Dyer and Trevor Moniz sided with the Opposition to accept an amended motion of censure tabled by PLP Deputy Leader Jennifer Smith. Introducing her motion, Ms Smith told the House that the Bermuda Monetary Authority circular on fast food franchises published last year was clear and precise -- and beneficial to Bermuda.

And she accused Government of changing the previous ban on fast food franchises. "If there were loopholes in the policy, this should have been closed -- if there was something wrong with the policy, proper action should have been taken to amend it.'' She added: "The public is concerned about a level playing field, pay-offs and concerned about the policy changes.'' The motion accused Dr. Saul of disregarding the public interest and contributing to the disruption of the House by using an Attorney General's opinion on Mrs. Cartwright DeCouto's anti-franchise bill. This had the effect of influencing the legislative process.

Dr. Saul was also accused of failing to protect Bermuda's restaurants and lunch wagons by backing the change in policy. In addition, he was charged with failing to act on an anti-franchise petition and not appreciating the degree of public unease over the issue.

During the debate, Mr. Woolridge appeared to liken Dr. Saul to former US President Gerald Ford, whose credibility was damaged by pardoning his predecessor Richard Nixon, Vote deals Premier major blow From Page 1 disgraced in the Watergate scandal.

Mr. Ford was replaced by Jimmy Carter, Mr. Woolridge pointed out.

In an emotional speech, Dr. Saul told MPs he had acted honourably and within the law, and stressed Government's franchise policy had not been broken. After he sat down, Deputy Premier Jerome Dill put his arm around Dr. Saul and whispered in his ear.

The motion proved the second humiliation of the day for Dr. Saul.

Earlier, he was left reeling after "The People's Five'' helped Opposition MPs halt debate on legislation to set up a company to manage the former Base lands. They frustrated a Government bid to pass The Base Lands Development Act 1996.

Yesterday, a Government source said it appeared Mrs. Cartwright DeCouto or Mr.

Woolridge was being positioned to mount a Premiership challenge.

Another source said: "It was interesting that Mr. Woolridge was the only rebel to speak on the motion. He compared Dr. Saul to Gerry Ford, which suggests he believes the Premier should be replaced. That to me sounds like the rebels are going to bid to have Dr. Saul replaced. They may put forward a no confidence motion in the Government.'' The source added he would be surprised if some action was not taken against the five rebels. Such action, the source said, could include admonishment, removal of the whip, or expulsion.

Government Whip Rick Spurling said the five rebels' conduct was already being scrutinised by a UBP caucus committee.

"It may well be another complaint will come forward as a result of their conduct in the House on Friday and Saturday and this will be taken into account when the committee makes a recommendation.'' Last night, Dr. Terceira described the censure motion outcome as predictable.

"The damage had already been done. There were two votes of Parliament against the franchise.'' Dr. Terceira sought to brush aside claims "The People's Five'' were attempting to unseat Dr. Saul. "You hear these things, and people suspect such things. The fact is the five of us have not discussed it.'' On the prospect of being disciplined, Dr. Terceira said: "It's really up to them. It would be silly for them to do so. It's not us who are holding the Country to ransom.'' Mrs. Cartwright DeCouto said the censure motion "spoke for itself'' "It clearly shows that those who voted in favour were extremely concerned with the Permier's handling of the franchise issue.'' She declined to comment further.

Mr. Moniz said the Premier's credibility has suffered a serious knock. "Where do we go from here? That's for Dr. Saul. Legally he's not forced to do anything. But obviously his credibility has been further damaged by his behaviour throughout the whole debilitating franchise debate.

"Dr. Saul's only defence is `we have done nothing unlawful'. That's pathetic.

Surely he has some higher moral and ethical standard.'' Mr. Moniz said he was disturbed by Dr. Saul's Parliamentary response to the censure motion, accusing him of making misleading statements. It was incorrect for Dr. Saul to claim he had told every member of the UBP caucus about the Attorney General's opinion on Mrs. Cartwright DeCouto's bill before it came to the House.

Opposition Leader Frederick Wade said the censure motion placed the Premier's credibility under the spotlight. "It's up to him whether he will resign. The law does not force him to do anything.

"As far as principles and integrity are concerned, that's a different matter.

Bermuda, however, is not famous for producing people of principle and integrity. If Dr. Saul was in Great Britain he would resign and if he was in America he would be forced to resign.'' Dr. Gibbons said he had received no indication Dr. Saul might resign.

"The motion of censure is something the Premier and his colleagues will have to talk to over the next few days. Clearly, the motion was entirely politically motivated. There was no substance to it. It was an embarrassment to Bermuda.'' See Editorial, Page 4