"Yes, Jamali has tendered his resignation today (Saturday)," senator Muhammad Ali Durrani of National Alliance, a key component party of ruling alliance, told AFP yesterday.

The resignation came following his meeting with President Pervez Musharraf.

"Jamali presented his resignation to President Pervez Musharraf which he accepted," Durrani said.

Musharraf has asked Jamali to continue until a new prime minister takes charge, Durrani said.

In recent weeks there has been mounting speculation in the Pakistani press over the future of the prime minister, who was appointed less than two years ago following general elections after the military coup led by Musharraf in 1999.

Newspapers predicted Jamali could go as a result of a power struggle within the governing Pakistan Muslim League.

There was speculation that relations between the president and the prime minister had deteriorated over Jamali's alleged failure to fully endorse Mr Musharraf's policies.

Jamali had strongly denied the rumours about his resignation Friday night at a reception at his official residence, blaming newspapers for carrying speculative stories.

Durrani said he believed Jamali's resignation was not result of any confrontation or tension with president.

"Maybe President Musharraf wants to give a new pace (to government) and bring a new team."

Information Minister Sheikh Rashid said an official announcement on whether Jamali has resigned or not would be made at the parliamentary party meeting later yesterday.