Prime Minister Tomiichi Murayama, dogged by a faltering economy and a disillusioned electorate, announced his resignation Friday, saying he had done his best in difficult times.

In a surprise move, Murayama and his entire Cabinet said they would formally step down Monday, setting the stage for a shift of power to Ryutaro Hashimoto, Japan's combative trade minister."Despite a series of unexpected problems, I did my best," said Murayama, 71, who took the top job 18 months ago as a political neophyte. "I've used up everything I have."

He and his ministers were to stay on as caretakers until a new government can be formed. The new prime minister, expected to be Hashimoto, was to be elected at a special parliamentary session, which ministers said could take place as early as Thursday.

That means President Clinton will be meeting a new Japanese leader when he pays a state visit scheduled for April 16-18.

The bushy-browed Murayama took office in June 1994 at the head of a coalition cobbled together from liberal and conservative parties. His unlikely government proved unexpectedly durable.

With simmering discontent over the stagnant economy and finance industry scandals, however, the prime minister's popularity plummeted, and he was seen as a weak candidate to lead the coalition in new elections.

Murayama's tenure was marked by some of Japan's biggest disasters of recent years. The Kobe earthquake last January killed more than 6,000 people, and the nation was deeply shaken by a doomsday cult's nerve gas attack in March on the Tokyo subway, which killed 12 people and sickened more than 5,500.

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The prime minister also presided over a year of painful remembrances of World War II, which ended with Japan's surrender 50 years ago in August. He made among the most forthright apologies yet by a Japanese leader for past militarism but was unable to win lawmakers' backing for the statement.

Murayama had said previously he would like to resign, but that he feared weakening his coalition. The timing of Friday's announcement caught even close associates by surprise. "It was out of the blue," said chief government spokesman Koken Nosaka.

Murayama called a meeting Friday with the leaders of the three parties in his ruling coalition and told them he wanted out.

Reports quoted Murayama as urging party leaders to keep the coalition together. Ministers indicated they would try to follow through but acknowledged they had policy differences to address.

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