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VILNIUS, Oct 27 (AFP) - Lithuanian Prime Minister Rolandas Paksas resigned Wednesday over a controversial plan to sell an oil refinery to a US oil company in a deal which had already cost the jobs of another premier and two ministers.
Paksas quit after seeing the cabinet, dominated by his own Conservative Party, overrule his opposition to sell the Mazeikiai Nafta refinery to Williams International.
His decision leaves the cabinet and President Valdas Adamkus to take the final decision on the issue.
"I do not want, and cannot be responsible for the consequences of the decision," said Paksas following his resignation.
"I disagree with such a contract and with the present conditions of the contract."
Paksas, 43, said the agreements were ready and could be signed by the acting government by October 29.
"I have done nothing to sabotage the agreements and their destiny is in the hands of the cabinet," he said.
Irena Degutiene, the social affairs minister, was immediately named acting prime minister, and the government was due to meet late Wednesday.
After 18 months of talks, negotiations between Lithuania and Williams are still not concluded but have now claimed the resignations of two prime ministers, two economy and finance ministers and two directors of the refinery.
Williams' demand that Lithuania make up in cash a 350-million-dollar (325-million-euro) shortfall in Mazeikiai Oil's operating capital next year has angered many in Lithuania, because the US company will be paying only 150 million dollars (139 million euros) over a three-year period for a 33-percent stake in the refinery.
Lithuania's economy and finance ministers resigned last week when the cabinet forced through the sale decision. The ministers both said the sale would send the country's fiscal deficit soaring to 12 percent of gross domestic product and possibly ruin the economy.
From the beginning the plan to sell the refinery was more a geopolitical move than pure business, a bold move to step out of Russia's shadow, bring in US investors and boost Lithuania's chances of entry to NATO and the European Union.
"This is a question of our economic independance from Russia," Conservative party leader and parliament speaker Vytautas Landsbergis said.
The move is fraught with problems, however, as the Mazeikiai refinery is dependent on Russian crude oil supplies.
Russian oil major LUKoil is unhappy with being frozen out of the deal, and supplies to the refinery have been cut to critically low levels, causing it to lose an estimated 50 million dollars (46.4 million euros) this year.
Even if Lithuania concludes the deal with Williams on Friday, the refinery is likely to encounter problems in securing oil supplies.
The government's investment in the refinery will send the budget out of kilter, probably closing the door to help from international financial institutions, thus threatening the country's credit rating and jeopardising bank loans needed to modernize the refinery.
The deal has also thrown Lithuania's politics into turmoil.
Early elections are unlikely as the Conservatives hold a parliamentary majority, but it is unclear who will emerge as premier.
When Gediminas Vagnorius resigned as premier in May, the Conservatives turned to the young and popular Paksas, then mayor of Vilnius.
With the country's deteriorating economic situation and the Mazeikiai deal increasingly unpopular among Lithuanians, analysts believe Paksas may have saved his long-term political career with his timely exit from the premier's post.
Although parliamentary elections are still one year away, recent public opinion polls rate him the most popular politician in Lithuania.