Mr Kaunda, who led the country for 27 years after independence, denied that any deal had been worked out to induce him to step down.

He said he wanted to concentrate his efforts on a peace institute he founded several years ago.

The announcement was welcomed by a spokesman for Frederick Chiluba - Mr Kaunda's successor as President.

Tearful farewell

Correspondents said Kaunda, aged 74, wept as he made the announcement.

He said he would step down as leader of his United National Independence Party (UNIP) and retire from party politics.

UNIP would soon hold a congress to choose a leader and "this time I will not participate," he said.

Jail and house arrest

Mr Kaunda was charged with knowing about preparations for a military coup last October but failing to inform the Zambian authorities.

The badly-organised coup attempt was quickly crushed by loyal forces of the Zambian army.

The government arrested scores of opposition activists. Mr Kaunda was detained on Christmas Day, provoking an international outcry. He was subsequently moved from jail to house arrest.

He was freed on Monday after the charges were dropped.