The five monkeys problem!

Ok, let me admit that the version of the puzzle I heard said pirates. I felt compelled to change things to fit my monkey theme... So here goes:

So we start out with a bunch of monkeys, right? Ok, five, to be precise. These guys are logical enough to be Ayn Rand's poster boys... meaning very very logical. They are greedy (Midas++), and very very bloodthirsty (like the villain of some B-grade Bollywood movie). Bloodthirsty, did you say? Well yeah, they really really like to kill people or as the case may be... monkeys. If they don't gain anything by keeping you alive, they prefer you dead! :-o

So anyways, these guys land up on a treasure island, right? And what do they find there but a chest with one thousand gold coins (1000). Obviously, each one wants the biggest share he can get for himself. But here is where community ordering and a sense of hierarchy come in! The monkeys always answer to their leader. Second, third, fourth and last in command are well established. Maybe we should make things easier for ourselves, and just give them hierarchy numbers: 1, 2, 3, 4 and 5.

So here's how they divide the booty. Monkey #1 proposes a division, and by division, I mean something of the nature of 1: 200, 2: 200, 3: 200, 4: 200 and 5:200. Everyone else votes on it. A strict majority passes the proposal and everyone retires happy. And if the proposal is not passed? Monkey #1 is killed and the responsibility of division falls on M#2 and so on... till consensus is reached. A STRICT majority is needed, by the way. This means that when there are four monkeys, a proposal is passed only when three vote for it.

Its fairly obvious to see that the proposal above is not going to work. Right? Clearly, by getting rid of grandpa, everyone else can get a bigger share? Or can they? Will grandpa's guiles prevail?

What does grandpa, aka Monkey Number 1 (no, not Govinda silly), do now? Gmail me at karthikp.