Malaysian Prime Minister Muhyiddin Yassin has handed his resignation to the king but will stay on as interim premier, the palace said on Monday, after months of political turmoil culminated in the loss of his majority.
Muhyiddin's hand had been weakened by months of infighting in his coalition and it is unclear if the developments will ease Malaysia's political crisis after a tumultuous 17 months in office for the prime minister.
The palace said an election was not the best option and King Al-Sultan Abdullah was happy for Muhyiddin to stay on as caretaker.
"The king has received the resignation letter of Muhyiddin Yassin and the entire cabinet effective immediately," it said in a statement on Facebook.
"Following the resignation, the king is pleased for Muhyiddin to fill the role as caretaker prime minister until a new prime minister is appointed."
Later, in a nationally televised speech, Muhyiddin said he submitted his resignation to the king because he had lost the confidence of a majority of lawmakers, adding that he hoped a new government would be formed as soon as possible.
He had arrived at the national palace earlier on Monday, but his office did not respond to Reuters' requests for confirmation at the time.
The power struggle in the ruling coalition unfolded at a time when Muhyiddin has sought to reboot a pandemic-stricken economy and curb a resurgence in Covid-19 cases.
The ringgit currency had earlier fallen to a one-year low and the stock market slipped.
Muhyiddin stays on in a role, for which there was no other clear candidate in the absence of any party with a clear majority in parliament.
The king said it was not suitable to hold elections during a pandemic. Malaysia's infections and deaths per million rank as the highest in Southeast Asia.
The decision was thrust into the hands of the king, who can appoint a prime minister from among elected lawmakers on the basis of who he thinks is most likely to command a majority.
The prime minister held a special cabinet meeting on Monday morning, state news agency Bernama reported.
Muhyiddin's grip on power has been precarious since he took office in March 2020 with a slim majority.
Pressure on him mounted recently after some lawmakers of the United Malays National Organisation (UMNO) party, the largest bloc in the ruling alliance, withdrew support.
Muhyiddin had said the recent crisis was brought on by his refusal of demands such as dropping graft charges against some individuals.
UMNO politicians faced with corruption charges include former premier Najib Razak and party president Ahmad Zahid Hamidi. They have denied wrongdoing and were among those who withdrew support for Muhyiddin this month.