Hungarian Prime Minister Peter Medgyessy, who had offered to quit over a controversial cabinet reshuffle, submitted his resignation Wednesday.

The move is seen as a proactive step taken by Medgyessy to avoid an embarrassing ouster by his ruling Socialist Party that is set to hold a no-confidence vote on him in parliament next month.

"I have made this decision in order to allow the ministers, the government to keep their heads high, because for the sake of the whole government, it is necessary to preserve the dignity of the cabinet," Medgyessy told a press conference.

"This way, we can assure a smooth, civilized and predictable transfer of power," he added.

Medgyessy offered to resign last week over the cabinet reshuffle dispute and the party said it would accept his resignation.

"This is only a legal technicality which does not change the fact that the country will have a new prime minister", the Socialists' parliamentary leader Ildigo Lendveai said in his response to Medgyessy's resignation.

(Xinhua News Agency August 26, 2004)