PORT MORESBY, Papua New Guinea (AP) _ In a victory for rioters and army mutineers, the government suspended its contract with mercenary soldiers. But protest over the use of foreign forces to quell a rebellion surged Friday at a new site.

Police in Lae, the nation's second-biggest city, 185 miles to the north, fired tear gas to break up crowds and went to the local university to head off a planned protest.

The hiring of mercenaries to help put down a nine-year uprising on the island of Bougainville has provoked days of street riots in the capital and an army mutiny, with soldiers detaining 43 of the foreigners sent to train them.

Five people were injured in clashes Thursday in Port Moresby Thursday, but a stronger and more organized police crackdown kept order on the streets Friday.

The army deported about 20 other mercenaries before Prime Minister Sir Julius Chan suspended a military contract with British-based Sandline International on Thursday for at least two weeks pending a judicial investigation.

The unrest began in this capital, 500 miles north of Cairns, Australia, on Monday when Brig.-Gen. Jerry Singirok declared that the army would not work with the mercenaries. Chan then ousted Singirok for insubordination.

Singirok says the government overpaid the firm while army soldiers received minimal wages, and claims the mercenaries were functioning as more than advisers in planning attacks on rebels on Bougainville, an island 800 miles northeast of Port Moresby.

Singirok charged that Sandline planned to use Soviet-era helicopter gunships to fire missiles at rebel-held villages on Bougainville, which he said would inflict casualties on civilians.

More than 1,000 people have died since the conflict began in 1988. The ill-trained, poorly motivated government soldiers have been no match for guerrillas operating on their own turf, the thickly jungled mountainous island rich in copper.

Chan said he hired Sandline to train Papua New Guinea's army because he was ``tired of seeing his boys come back in body bags.'' Sandline, in turn, subcontracted much of the work to the South African mercenary firm Executive Outcomes, known for its work in Angola and Sierra Leone.

After three days of mostly peaceful protests, thousands demonstrated Thursday in Port Moresby, chanting anti-Chan slogans and demanding the mercenaries leave Papua New Guinea, which makes up the eastern half of New Guinea.

The protests turned violent when the demonstrators defied tear gas and police dogs to loot stores, then gathered outside the army barracks.

Inside the army headquarters, soldiers loyal to Singirok tried to join the protests but were injured by rubber bullets and tear gas fired by riot police. At least five people were seriously hurt, authorities said.

Despite orders from Chan to let the mercenaries go, soldiers continued Thursday to confine 43 British and South African fighters to barracks where they had been training local troops in counterinsurgency techniques.

Chan, insisting that the government had ``listened to the wishes of the people,'' said he ordered an inquiry because it was ``the only way to dispel all allegations against the government.''

Francis Ona, leader of the rebel Bougainville Revolutionary Army that has been fighting for an independent state on Bougainville, ``was very much elated'' by the turn of events, his spokesman said from Sydney, Australia.