(adds rights groups' death toll, Miliband, details)

By Daniel Wallis and Katie Nguyen

NAIROBI, Jan 2 (Reuters) - President Mwai Kibaki's government accused rival Raila Odinga's backers on Wednesday of responsibility for an explosion of tribal violence over a disputed election that has killed more than 300 Kenyans.

"Supporters of Raila Odinga are involved in ethnic cleansing," said spokesman Alfred Mutua as the death toll from five days of escalating clashes rose to more than 300, according to a state-funded local rights group.

Odinga's supporters, drawn mainly from his Luo tribe, have made similar charges against Kibaki, whose Kikuyu have dominated political and business life in East Africa's biggest economy.

Western powers have called for calm and Britain has urged the African Union and Commonwealth to try to reconcile Kibaki and Odinga whose parties accuse the other of vote-rigging during the Dec. 27 election.

"There are independent reports of serious irregularities in the counting process," said British Foreign Minister David Miliband and U.S. Secretary of State Condoleezza Rice in a joint statement. They called for an end to violence and "an intensive political and legal process" to end the crisis.

As young men armed with machetes manned roadblocks in rural areas, a trickle of office workers in the capital Nairobi made it through police cordons to begin the new working year.

"They call this democracy," said a central bank worker, delayed by police as he tried to get to work.

The turmoil caused delays and confusion in local markets.

Currency trading was delayed then muted, while stocks went lower, and tea and coffee auctions were postponed.

"If some normality comes back, we will resuscitate the business," a tea broker told Reuters.

On Tuesday, about 30 Kikuyus died when a mob set fire to a church where they had taken sanctuary in the western town of Eldoret -- reviving memories of the slaughter in churches of hundreds of thousands in Rwanda's 1994 genocide.

The Eldoret attack was one the worst episodes of violence that has uprooted nearly 100,000 Kenyans, many of them fleeing across the border to Uganda. It sparked reprisal attacks.

Adding to the chaos, Kenya's electoral commission head Samuel Kivuitu said: "I do not know" when asked if Kibaki won the vote. The comment by Kivuitu, who pronounced Kibaki victor on Sunday, stunned Kenya and cast further doubt on the result.

Western powers have warned their citizens against visiting a popular tourist destination that was regarded as one of the most stable democracies on a volatile continent.

"MADNESS"

African Union chairman John Kufuor was planning to fly to Kenya and start mediation, while British Prime Minister Gordon Brown was on the phone to both sides.

"There are elections in other parts of Africa over the next 18 months, in Angola, in Ghana, in Malawi. Kenya is very, very important in and of itself and it is important for what it says about the rest of Africa and its approach to democracy," Miliband said.

A Reuters reporter flying over Eldoret saw plumes of white smoke billowing blazing homesteads. Youths with machetes, rocks and bows and arrows could be seen manning crude checkpoints.

There was early calm in Nairobi slums on Wednesday but residents said Mungiki, a gang with roots in traditional Kikuyu rites, dropped leaflets warning of reprisals against Luos.

In Naivasha town in Kenya's Rift Valley, scores of people were injured in revenge attacks for the church killings, and about 300 terrified locals spent the night camped at a police station and prison for safety.

"We had to seek refuge in the only safe place we know," said Agnes Alouch, in the prison hall.

Kibaki was sworn in on Sunday after official election results showed he had narrowly beaten Odinga. The EU's observer mission said the poll had "fallen short of key international and regional standards for democratic elections".

In comments broadcast on local TV, Kivuitu said he was pressured by Odinga and Kibaki's party colleagues to announce the poll results immediately. Four members of Kivuitu's team have said they would call for a judicial review.

Media, church leaders and others pleaded for calm.

"This madness cannot be allowed to go on," said Kenya's leading newspaper, the Daily Nation.

(Additional reporting by Nicolo Gnecchi, Helen Nyambura-Mwaura, George Obulutsa, Daniel Wallis, Antony Gitonga, Bryson Hull; editing by Andrew Cawthorne and Philippa Fletcher)

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