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In a file picture taken on Februay 2, 2015, East Timor Prime Minister Xanana Gusmao (R) speaks to journalists in Dili after a meeting with President Taur Matan Ruak. Gusmao has sent a letter of resignation to the president, and the head of state is now deciding whether he accepts the offer to stand down, the government said on February 6, 2015.

VALENTINO DE SOUSA/AFP / Getty Images

East Timor independence hero Xanana Gusmao resigned as prime minister Friday, stepping down ahead of an expected restructuring of the government next week.

Gusmao, 68, is a former guerrilla leader who spearheaded East Timor's drive for independence when Indonesian rule ended in 2002.

He was the first president of the new country, from 2002 to 2007, and then prime minister for more than seven years.

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East Timor voted overwhelmingly in 1999 to end 24 years of brutal Indonesian occupation that had left more than 170,000 dead, but the country has struggled since then to develop economically. About half of the population of 1.2 million people live in poverty.

An adviser to Gusmao, who did not want to give his name because he's not authorized to speak publicly about the resignation, said Gusmao felt now was the time to pass the responsibility of governing to the next generation.

He said it was part of a restructuring of the government that is expected to be announced next week. Under the proposal, the Cabinet would be reduced from 55 to 34 ministers and would become more inclusive, with opposition members among those appointed.

A government statement said that Gusmao, 68, submitted his resignation to President Taur Matan Ruak.

"Recently the prime minister encouraged all members of government to work calmly in this time of transition until the new government is sworn in," the statement said.

Gusmao is a former guerrilla leader who spearheaded East Timor's drive for independence when Indonesian rule ended.

He was the first president of the new country, from 2002 to 2007, and then prime minister for more than seven years.

Story continues below advertisement

East Timor voted overwhelmingly in 1999 to end 24 years of brutal Indonesian occupation that had left more than 170,000 dead, but the country has struggled since then to develop economically. About half of the population of 1.2 million people live in poverty.

The move was expected as local media reports said Gusmao had advised fellow lawmakers that he would step down.

If his resignation is accepted, Gusmao is expected to maintain a role in government, perhaps as a co-ordinating minister, the adviser said, but the aim is for the older generation of leaders to give way to a new generation.

The adviser said that Gusmao, the president and lawmakers are discussing who will be the next prime minister but that it was unlikely to be announced before next week.

Former president and Nobel Peace Prize winner Jose Ramos-Horta was not expected to play a role in the new government, the adviser said.

East Timor was a colony of Portugal until it declared independence in late 1975. It was then invaded and occupied by Indonesia until a U.N.-backed referendum in 1999 followed by it becoming a sovereign state on May 20, 2002.

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