AFP - The Arctic territory of Greenland started a new era of self-rule Sunday after 300 years under Danish authority, moving closer to independence with a potential oil bonanza below its icecap.
  
The new status took effect as Greenland celebrated its national day, six months after 75 percent of voters approved a referendum to hand more power to the local government and take control of the island's vast natural resources.
  
Festivities were to begin with a flag-raising ceremony, while Denmark's Queen Margrethe and Prime Minister Lars Loekke Rasmussen were to mark the event with local leaders.
  
Denmark granted Greenland limited sovereignty when its parliament approved home rule in 1979.
  
But the self-rule status, agreed after years of negotiations, gives the island of 57,000 inhabitants more control over its gas, gold and diamond reserves.
  
US scientists believe Greenland's northern tip is especially rich in oil and gas and they say global warming could actually help unlock the untapped wealth and provide a solid foundation for an independent economy.
  
If it proves to be "sufficiently large to prop up the island's economy", Greenland will be well on the road to full independence from Denmark, said Lars Hovbakke Soerensen, a historian at the University of Aarhus.
  
Greenland, which holds 10 percent of the world's freshwater reserves, is one of the areas most under threat from global warming, which in turn will affect its lucrative fishing industry.
  
That will force political leaders to look underground in a bid to diversify the economy and cut reliance on its former colonial master for funding.
  
Under the self-rule agreement, Greenlanders will be recognised as a distinct people with the right to self-determination and Greenlandic will become the territory's official language.
  
As it begins self-rule, the island has also entered a new political era.
  
The social democratic Siumut party was ousted from power after 30 years amid allegations of misuse of public funds and corruption.
  
Spurred on by deepening social and economic problems, voters rebelled against Siumut, putting the extreme-left Inuit Ataqatigiit (Community of the People) party into power with some 44 percent of votes.
  
Greenland is rife with social problems, such as alcoholism, and one in three children is a victim of domestic violence and has bad living conditions.
  
Hospital waiting lists are lengthy and the gap is growing between the rich and the poor.
  
Inuit Ataqatigiit, which wants complete independence from Denmark, is led by 51-year-old intellectual Kuupik Kleist.
  
He wants to create "a new society for a new era" by narrowing the gap between the rich and poor and improving public services.
  
Kleist has formed a coalition with two centrist parties, the Demokratiit (Democrats) and the Kattusseqatigiit Partiiat (Candidate List Party).
  
The coalition partners hold a total of 19 seats in the 31-seat parliament, the Landsting.
  
Independence remains Inuit Ataqatigiit's "primary objective" but will not be top of its agenda in the short-term, Soerensen said.
  
First off, Kleist "has to tackle the islanders' social and education problems in an economy that depends to 50 percent on annual subsidies from Denmark," he said.
  
"Only when those issues have been resolved will the party take up the cause of independence," Soerensen added.