Brian Cowen announced Saturday he was stepping down as party leader of Fianna Fail - but would stay on as Irish prime minister until elections on March 11, dpa reported.
Cowen survived a secret confidence ballot last week, but was immediately rocked by further resignations following his handling of the country's economic meltdown last year.
"I'm concerned that renewed internal criticism of Fianna Fail is deflecting attention from this important debate" Cowen told a press conference in Dublin.
"Therefore, taking everything into account after discussing the matter with my family, I have taken, on my own counsel, the decision to step down."
Cowen pushed through a swinging round of spending cuts, public pay freezes and tax hikes in an emergency austerity budget late last year, after receiving a bailout from the European Union and International Monetary Fund.
Early elections were then set for March, which his party appears bound to lose.
His party, Fianna Fail, governs in coalition with the smaller Green Party, but is facing an almost certain drubbing in the March election, according to polls putting it at an historic low of 11 per cent, after voters blamed his government for the economic turmoil.