Taiwanese Prime Minister Su Tseng-chang has resigned, less than a week after losing his party's primary for the 2008 presidential election.
Mr Su had been widely tipped to win his party's presidential primary
Mr Su said he had resigned to allow President Chen Shui-ban to "strategise in the new environment" during his final year in office.
Mr Su lost out to Frank Hsieh, whom he succeeded as premier in 2006, in the Democratic Progressive Party's vote.
The president has said will announce Mr Su's successor later on Saturday.
The new prime minister will be the sixth to serve under Mr Chen during his seven-year term in office.
'Not giving up'
At a press conference in Taipei, Mr Su said his resignation had already been accepted by the president.
"To allow the president to strategise in the new environment, I am willing to co-operate and release myself and I have told this to the president and he has approved," he said.
"Although I have given up my duties, I have not given up on Taiwan."
Mr Su's decision to resign followed his failure to win the first round of the DPP's primary for the presidential election in March 2008.
Mr Hsieh surprised many by taking an 11 point lead over Mr Su, who many thought would be the front runner.
A second round had been planned, but Mr Su and the other two candidates announced they would step aside and support Mr Hsieh.
Mr Su reiterated that he accepted the result of the primary, despite accusations of corruption, smear tactics and party bias.
"The Democratic Progressive Party's primary may not be perfect but I announced that I will withdraw... and the DPP showed that it can stand united," he said.
Widely known as the "light bulb", in reference to his bald head, Mr Su is a former human rights lawyer and co-founder of the DPP.
The DPP advocates a separate identity for Taiwan, while its main rival, the Kuomintang (KMT) party, opposes independence from China and favours closer ties with Beijing.
The KMT has named Ma Ying-jeou, who is facing corruption charges, as its candidate for the 2008 election.