Mahathir to step down in 2003

Deputy PM Abdullah Badawi is expected to take over as Mahathir's chosen successor

KUALA LUMPUR, Malaysia (CNN) -- After dropping a political bombshell at the weekend announcing that he was quitting politics, Malaysian Prime Minister Mahathir Mohamad has agreed to stay in office until late 2003, his party has announced.

During the transition period he will hand over many of the day-to-day duties of running the country to his deputy, Abdullah Badawi, Khalil Yaakob, Secretary General of Mahathir's UMNO party said Tuesday.

Abdullah will take over as Mahathir's chosen successor after Malaysia hosts a summit of the Organization of Islamic Conference, he said.

On Saturday, Mahathir broke down in tears live on national television as he told a stunned UMNO annual congress that he was resigning from all his political and party posts.

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Quickly hustled off stage by party colleagues, it was announced about an hour later that he had retracted his decision after officials in the party's supreme council virtually begged him to stay on.

Despite the apparent retraction, the announcement gave the country's financial sector a nasty case of the jitters, knocking confidence among investors but stopping short of causing a plunge in stock values.

Since Mahathir's shock announcement, almost nothing has been heard of his future plans -- least of all from the man himself, who jetted out of the country Sunday for a 10-day sailing holiday in Italy.

UMNO and its partners in the ruling Barisan Nasional coalition have been in virtual lock-down with officials holding high-level meetings Tuesday to discuss the future leadership.

Transition

They are thought to have been hammering out a compromise deal, laying out the course of a leadership transition after Mahathir apparently caught colleagues by surprise.

Mahathir has been in power since 1981 and is Asia's longest serving political leader.

He has often talked of standing down and the need to make way for the next generation of leaders, but what exactly prompted his sudden and highly emotional announcement on Saturday is not known.

Mahathir breaks down after announcing his resignation

Opposition leaders have accused him of stage-managing the whole affair, purely to generate a show of total loyalty and bolster support for UMNO which has lost ground to the opposition fundamentalist Pan-Malaysian Islamic Party (PAS).

"This is another classic case of play-acting by UMNO and Dr. Mahathir," said PAS official Hatta Ramli.

"I think this is a desperate attempt to fish sympathy and votes and he may call for an election soon."

PAS made strong gains in the last elections in 1999 which were largely attributed to the backlash against the government following the firing and jailing of former deputy PM Anwar Ibrahim following a power struggle.

Anwar, who for years was groomed as Mahathir's successor, has been convicted of sodomy and corruption and is serving prison terms totaling 15 years.