Japanese prime minister Yasuo Fukuda announced today he was resigning.
Mr Fukuda, who has been in power for less than a year, was increasingly unpopular with the electorate and struggling with a divided parliament.
Mr Fukuda (72) told a press briefing in Tokyo today he decided to step down because of the parliamentary deadlock. His Liberal Democratic Party is in disarray after losing control of the less-powerful upper house in July 2007 to the Democratic Party of Japan.
His predecessor Shinzo Abe resigned last September.
Mr Fukuda last month turned to Taro Aso, his rival for the leadership of the ruling Liberal Democratic Party and a popular former foreign minister, to help shore up his administration in a sweeping reshuffle of the cabinet and LDP posts.
The prime minister appointed foreign policy hawk Mr Aso (67) to be LDP secretary general, a position he held under Mr Abe.
He saw support ratings sink below 30 per cent as he prepared to fight a general election - which must be held in the next year.
He had replaced 13 of his 17 ministers and the reshuffle was seen as an attempt to address increasing voter unhappiness about the state of the economy and rising food and fuel prices.
His sudden resignation may derail the nation's fiscal reform efforts if a new leader prioritises stimulating an economy on the verge of recession, economists said.
Mr Fukuda has been keen to rein in Japan's huge public debt, the highest among major industrialised nations while Mr Aso has been more vocal about spending more to boost the world's second-ranked economy.
Agencies