The outgoing President of Taiwan, Lee Teng-hui, has announced his resignation as leader of the Kuomintang - the party which had until last weekend dominated Taiwanese politics for more than 50 years.

His departure 18 months early was an acknowledgement of responsibility for a presidential election defeat that saw the party's candidate come a poor third.

Crowds of angry protesters and members of parliament had besieged the party headquarters calling for him to step down.

Chen Shui-bian will take over as president

Vice-President Lien Chan, the party's candidate in the election, was unanimously approved as acting chairman by the party's Central Standing Committee.

Party spokesman, Huang Hwei-chen, said: "There are many reasons for losing the election, but as Nationalist Party chairman, Teng-hui has the burden of taking responsibility."

Mr Lee's resignation as party chairman marks a dramatic fall from grace for the man dubbed "Mr Democracy" for leading the island out of decades of authoritarian one-party rule - including almost 40 years under martial law.

'Clamour for reform'

Earlier this week Taiwan's Chung-Kuo Shih-Pao newspaper spoke of a "clamour for reform" within the party.

Mr Lee, aged 77, had initially rebuffed pressure from party officials to resign.

He reportedly commented that "old ginger is spicier".

Kuomintang has ruled Taiwan since 1949.