Malaysia's ruling party has confirmed that Prime Minister Mahathir Mohamad will step aside next year. Dr. Mahathir, now expected to lead UMNO into the next elections, will be succeeded by deputy leader Abdullah Ahmad Badawi.

The announcement that Prime Minister Mahathir Mohamad will resign next year as head of the ruling United Malays National Organization (UMNO) ends three days of political uncertainty.

Dr. Mahathir stunned the nation Saturday with an emotional outburst at the end of a speech to the UMNO national congress, saying he was giving up his party and government posts. He has been prime minister for 21 years, and UMNO under his leadership has overwhelmingly dominated Malaysian politics.

He then withdrew his decision after pleas by UMNO Party officials and a clamoring by party supporters.

Information Minister Khalil Yaacob on Tuesday read a statement on national television, ending the speculation over Dr. Mahathir's political future. The prime minister will retain his posts until after September, although he will soon go on two months of leave.

Dr. Mahathir is expected to lead UMNO into the next elections, which are likely to take place in early 2003.

Deputy Prime Minister Abdullah Ahmad Badawi will take over as party leader after a transition period.

Analysts have said Mr. Abdullah, a former foreign minister, is considered cautious and will need time to build party support.

Mr. Abdullah, 62, took the number two post in 1998, succeeding Anwar Ibrahim, who was fired because of allegations of sodomy and corruption. He is serving a 15 year jail term, on charges he said were trumped up by the government.

Wan Azizah Wan Ismail is the leader of the Kaedelan Party and the wife of Mr. Anwar. She said Dr. Mahathir remains very much in control, leaving Mr. Abdullah little room to make changes.

"There may be a lame duck situation where the acting prime minister having reputedly said that the prime minister is still Mr. Mahathir and president of UMNO and he said he is not going to change any thing for the moment," she said.

Dr. Wan Azizah has said there are growing doubts over when Dr. Mahathir will formally step aside, as the date of his resignation remains unclear.

A key issue facing UMNO will be who will succeed Mr. Abdullah as deputy prime minister. Some political analysts say there could be a power struggle in UMNO as senior members jostle for position.