In a shock announcement on live television, Russian President Boris Yeltsin has said he is resigning immediately and has named Russian Prime Minister Vladimir Putin as acting president.

President Yeltsin said he had signed his resignation decree on Friday morning and that presidential elections would be held on 26 March.

Russia's Security Council, an advisory board of top security officials, is due to meet later on Friday, a meeting which will be chaired by Mr Putin in his capacity as acting president.

President Yeltsin has handed over the "nuclear briefcase", which contains the codes controlling Russia nuclear weapons, to Mr Putin.

US President Bill Clinton was notified about President Yeltsin's move before dawn by Sandy Berger, his national security advisor.

After the resignation was confirmed in contacts with Russian officials, a White House spokesman, James Fallin, said "we consider this a dramatic step".

"While there is an element of surprise it was not a complete one," Mr Fallin said.

Surprise

The resignation annoucement was unexpected because President Yeltsin, 68, had repeatedly said he would serve out his full term, although poor health has led to increasing doubts about his ability to fulfil his promise.

"I am going. I am going earlier than my established time," President Yeltsin said in a broadcast on state-owned ORT television.

He said Russia needed to go into the new century with new political leaders.

It was announced that Mr Yeltsin will still make a visit to Jerusalem and on 5 January, a trip time to coincide with the Orthodox Christmas.

The Russian stock market rose sharply on news of the resignation, up nearly 17% by mid-day on heavy trading.

Apology

President Yeltsin chose a particularly significant day for his bombshell in a country where New Year is far more widely marked than Christmas.

He has presided over eight turbulent and often chaotic years of social and political transformation in Russia, which have seen the living standards of many people worsen.

During his address he appealed to Russians to forgive him for what he said had been the errors of his administration.

It was a highly unusual admission from a leader who rarely admitted mistakes and always insisted that his policies were correct.

"I want to beg forgiveness for your dreams that never came true. And also I would like to beg forgiveness not to have justified your hopes," the president said.

Ally

President Yeltsin made a clear endorsement of Mr Putin.

"To cling to power for another six months when the country has a strong person worthy of becoming president - why should I stand in his way? Why should I wait? It's not in my character," he said.

A former KGB officer who only became prime minister in August, Mr Putin is widely seen as the most popular politician in Russia, with around 60% of voters saying they would back him, according to opinion polls.

His strong handling of the war in Chechnya and no-nonsense manner has appealed to many Russians, who want strong leadership to tackle their country's enormous economic, political and social problems.

By bringing the date of the election forward three months, President Yeltsin has made it harder for Mr Putin's opponents to organise their campaign.

It will also help Mr Putin to act on his popularity while it remains at its height.

President Yeltsin has been hit by corruption allegations in recent months and has reportedly been looking for assurances for the safety of himself and his family when he steps down.

Mr Putin is an ally of President Yeltsin and would be able to give him the immunity he reportedly wants.

Mr Putin had already announced that he would run in next year's presidential elections and has indicated that he would continue Yeltsin's democratic and market policies.

He has talked of mixing moderate reform with the need for strong government to crush widespread lawlessness and corruption.