Tung Chee-hwa's frustrating and unpopular career as Hong Kong's leader is over.
Sources in Beijing say the Chinese Communist Party's politburo has accepted his resignation as chief executive due to poor health and stress.
The beleaguered Tung will announce his departure immediately after his nomination as vice-chairman of the Chinese People's Political Consultative Conference (CPPCC) is approved on March 12.
The resignation has sparked intense debate in Beijing over how to handle the succession. Crucial articles of the Basic Law are unclear in the face of what is an unprecedented political crisis.
Poised to take over the job is Chief Secretary for Administration Donald Tsang, the sources added, although no firm decision has been made.
The same sources say there is opposition by some pro-Beijing political parties in Hong Kong to Tsang.
Tung handed in his resignation before the Lunar New Year. It was approved following an emergency meeting of the politburo.
The resignation ends days of intense speculation that began when it was learned that Tung would become a vice- chairman of the CPPCC, a position equivalent to that of a state leader.
The position is seen as a face-saving gesture to Tung for eight years of loyal service to the mainland.
In the corridors of power, there were heated debates over whether to let Tung serve out his remaining two years in office or pick a new chief executive through the Election Committee for a five-year term.
A source told The Standard Tung wanted to quit on more than one occasion after the last July 1 mass demonstration.
He told top officials his health has been deteriorating and that he took painkillers just before he delivered his policy address in January this year.
Earlier attempts by Tung to quit were rejected, but central authorities decided to let him go, hoping the move would lead to more popular support for the government in Hong Kong.
By stepping down, Tung saves Beijing from having to defend an increasingly unpopular leader whose tenure in office has been marked by policy failures, popular discontent and massive public protests increasingly focused on his inept rule.
Tsang, consistently rated as one of the territory's most popular officials, is a professional civil servant and a logical choice to succeed Tung because he carries little of the baggage of failure that has marked the current administration.
Hints of Tsang's elevation first came in December last year when President Hu Jintao publicly shook hands with him in Macau, echoing the famous gesture offered by former president Jiang Zemin to Tung in 1996, shortly before Tung was tipped to be Hong Kong's first post-colonial ruler.
Since he was handpicked by Jiang, it is unlikely that a change in Hong Kong could have occurred prior to Hu consolidating his power in office late last year.
Beijing has grown increasingly frustrated with Hong Kong's political troubles.
Calls for universal suffrage and the continuing popularity of pro-democracy politicians at the polls have underscored the failure of Tung's government to secure popular support and led Beijing to worry openly about his effectiveness. In December, Hu gave Tung's government a rare and embarrassing public dressing down in Macau, calling for unity, greater competence and improved governance.
Through it all, Tung has remained stoic to the point of stony silence in the face of his critics, while never breaking ranks with his superiors in Beijing.
In keeping with usual practice, Tung's office remained silent on his future and refused to comment again Tuesday.
In order for Tsang to take over and serve out the remainder of Tung's second term, sources said, he will step down as chief secretary and stand for office under the current electoral rules for a term that will end in 2007.
If Tsang is able to serve until 2007, then the constitutional reform process that is currently underway to amend the rules for the election of the chief executive could still go forward, sources said.
Beijing is faced with one major headache in finalizing a transition: the legalities of choosing a successor.
Mainland experts specializing in the Basic Law have been instructed by the Standing Committee of the National People's Congress (NPC) to study Article 52 and Article 53 of Hong Kong's mini-constitution to search for a way forward.
"Beijing is still undecided on which way to go to choose a chief executive. Some key advisers argue that the next chief executive should only serve until 2007," a source said.
The source said an interpretation of Articles 52 and 53 by the NPC is a must and will prevent any legal challenge.
Others disagreed, arguing that under the Basic Law, the Secretary for Justice can map out the electoral arrangements for the new chief executive who would then serve a full five-year term.
According to the Basic Law, if the chief executive resigns, a successor will be picked by the Election Committee within six months. But there is no provision for a new chief executive to serve out just the remaining term.
If Tung's successor is to serve only until 2007, when the next election is scheduled to be held, sources said, the Basic Law could need to be reinterpreted.
There is heated debate over this point in Beijing, sources said.
Time is also running short because the five-year term of the current 800-strong Election Committee will expire on July 13.
Tung will arrive in Beijing today to attend the CPPCC plenary session starting tomorrow.