Mr Ouyahia, who has been in power for three years, has also faced much criticism from opposition parties for his failure to prevent the continuing civil conflict in Algeria.

Reports say Mr Ouyahia will be replaced by the presidential advisor and former ambassador to Paris, Ismail Hamdani.

Although Algeria's economy has progressed over the last four years, due to an International Monetary Fund (IMF) loan, Mr Ouyahia 's efforts to keep inflation down and consolidate the government's budgetary position have come at a high cost.

Hundreds of companies have gone bankrupt and hundreds of thousands of people have lost their jobs.

There were several strikes this year among teachers, postal workers, the metal workers' industry and the aviation sector, protesting against the country's economic situation.

Sinking oil prices have sharply reduced the country's foreign currency earnings, 95% of which come from the sale of oil and gas.

Mr Ouyahia has defended his policies by saying they would bring long-term benefit to Algeria and were necessary to make the transition from a state-run economy to a modern market economy.

Rising internal conflict

Many voters also blame Ouyahia's government for failing to curb violence by Islamic fundamentalists.

Opposition groups have been calling for his resignation since September when President Lamine Zeroual announced he would leave office before his mandate expires in 2000 and that a presidential poll would be held in April.

Muslim extremists began their uprising against the Algerian government in January 1992 after a general election was cancelled.