previous/next page function not working

<?php get_header(); ?>


<!--Theme options script-->
<?php
global $options;
foreach ($options as $value) {
	if (get_settings( $value['id'] ) === FALSE) { $$value['id'] = $value['std']; } else { $$value['id'] = get_settings( $value['id'] ); }
}?>


<div id="search_wrap">

<div class="wrap">


	<form method="get" id="searchform" action="<?php bloginfo('url'); ?>/">
	  <fieldset>
	    <input type="text" name="s" id="s" onblur="if (this.value == '') {this.value = 'Search...';}" onfocus="if (this.value == 'Search...') {this.value = '';}" value="Search..." />
	    <input type="submit" class="button" value="" />
	  </fieldset>
	</form>



<div class="text_size"><?php chgfontsize_display_options(); ?></div>
</div>
</div>
	<!--Content-->





	<div id="main">









		<!--Content left part-->
		<div class="wrap">

			<div id="tagline">
				<h3>
				<?php if (!have_posts()): ?>
				Page not found
				<?else: ?>
				<?php single_cat_title(); ?>
				<?php endif; ?>
				</h3>
			</div>


			<!--Sidebar-->
			<?php get_sidebar(); ?>


		<!--Content right part-->
		<div class="col_3_4">

			<!--Blog items-->



								<?php if (have_posts()) : while (have_posts()) : the_post(); ?>

								<div class="blog_item">


									<?php if ( has_post_thumbnail() ) { ?>
									<div class="image-holder size"><a href="<?php the_permalink() ?>"><?php the_post_thumbnail('blog'); ?></a></div>
									<?php } ?>

									<h2><a href="<?php the_permalink() ?>"><?php the_title(); ?></a></h2>

									<div class="blog_meta">
										<span class="left">Posted on: <?php the_time('F jS, Y') ?></span>
										<span class="right"><?php comments_popup_link(__('Comments (0)'), __('Comments (1)'), __('Comments (%)')); ?></span>
									</div>

									<div class="storycontent">
										<?php the_excerpt(); ?>
									</div>


									<a href="<?php the_permalink() ?>" class="more">Read more</a>

								<div class="clearboth"></div>
							</div>

							<?php comments_template(); // Get wp-comments.php template ?>
							<?php endwhile; else: ?>
							<p><?php _e('<h2>Sorry, no posts matched your criteria</h2>You might try to use our Site search <br>or try to browse the site with the main navigation menu'); ?></p>
							<?php endif; ?>
							<br />
							<div id="footer_nav"><?php posts_nav_link(' &nbsp;&nbsp;&nbsp;&nbsp; ', __('<span class="new">NEXT PAGE</span>'), __('<span class="old">PREVIOUS PAGE</span>')); ?></div>



		</div>



	</div>
	<!--End Content-->
	</div>

<?php get_footer(); ?>