The Peruvian Interior Minister, Fernando Rospigliosi, has resigned after a week of violent protests over government plans - now shelved - to privatise two regional electricity companies.

The minister was opposed to the imposition of a state of emergency in parts of the south of the country, which has been paralysed by a general strike, at the height of the unrest.

Toledo's popularity is at an all-time low

The government has put the privatisation plans on hold, until a further court ruling on their legality.

Hundreds of demonstrators were injured and one man was killed in the street protests, which spread after the government went ahead with the sale on Friday despite an earlier ruling halting it.

The mayor of the city of Arequipa, Peru's second city which was at the centre of the trouble, said putting the privatisation on hold was a sign that the government was now respecting the courts and listening to the people.

In a separate protest, public transport workers in the capital, Lima, are holding a two-day strike to protest against government moves to impose an insurance scheme.

Privatisation ruling

It is likely the judge will rule against the government, says the BBC's South America correspondent, Peter Greste.

With his approval ratings down to around 20% and signs that the protest was spreading, President Alejandro Toledo, who has only been in power since July, needed to find a quick solution to avoid an even wider crisis.

The latest agreement seems to have given him a way out, but the resignation of one of his most respected ministers suggests potentially damaging splits within the cabinet, says our correspondent.

It was President Toledo's announcement that he planned to sell off two regional electricity companies around Arequipa - about 1,000 kilometres (600 miles) south of Lima - that triggered the protests last week.

The locals accuse President Toledo of breaking a pre-election promise never to privatise public utilities.

They also rejected his insistence that the sale was vital to increasing local investment and creating jobs.

Instead the protesters point to previous privatisations where jobs were lost and any money raised went into the pockets of corrupt politicians.

Shops and schools in the region are closed and there is no transport.

Many tourists are reported to be stranded, while many others have been unable to reach the country's main tourist attraction, the Inca citadel of Machu Picchu.

The US State Department has issued a travel warning for Arequipa.