Mr Enkhbold was elected on an anti-corruption platform

Mr Enkhbold quit after the Mongolian People's Revolutionary Party (MPRP), the largest in the ruling coalition, voted to replace him as chairman.

Analysts say Mr Enkhbold, prime minister since January 2006, was forced out by party members concerned that his government was perceived as weak.

The MPRP, formerly the Communist Party, has ruled for much of the 20th Century.

It holds 39 seats in the 76-seat parliament, and formed a coalition government after Mr Enkhbold was elected prime minister.

Mongolia's parliament, the Great Hural, is expected to choose Sanj Bayar - who has already been named as the MPRP's new chairman - as the next prime minister.

Mr Bayar said there would be a new cabinet once he became prime minister.

But analysts say a big shake-up is unlikely so close to a general election, which is scheduled for summer 2008.

The communists once ruled Mongolia as a Soviet satellite, but in recent years it has become more independent, slowly embracing market-led reforms.