Paksas was facing strong criticism from his colleagues, and at a meeting in the small, central Lithuanian town of Anyksciai the Liberal Union's 15-member executive council resigned together with the chairman.
Eugenijus Gentvilas, the party's deputy chairman, was appointed acting chairman. He is expected to succeed Paksas at an extraordinary congress in October.
Vilnius Mayor Arturas Zuokas, a 33-year-old rising star among the Liberals, initiated a petition urging Paksas and the executive council to go. A majority of the members of the council, 75 of them, signed it.
"We cannot tolerate attempts to solve personal problems at the cost of the interests of our state and the Liberal Union," the petition read.
"I am forced to resign from the post of party chairman because the majority of the council demands it," Paksas said as he gave in although he added he had no intention of leaving the party altogether.
"I'm proud that the Liberal Union has become Lithuania's main right-wing political force and its second most influential party (after the Social Democrats) under my leadership of almost two years," Paksas said.
The meeting was good-humored. Paksas joked that he hoped his colleagues would find him "a job as a clerk or chauffeur in the party."
Paksas remains chief of the Liberal Union's parliamentary faction and leader of the opposition. The head of the largest opposition faction is called the leader of the opposition, according to the rules of the Lithuanian Parliament.
Gentvilas said that the changes of Sept. 5 would enable the party to stop the infighting between the "Gentvilists" and the "Paksists," and the party would be able to work more seriously. "The Liberals don't even have an alternative government program or shadow Cabinet because of these internal disagreements."
Gentvilas' backers accuse Paksas of failing to preserve the ruling coalition with the Social Liberals, the collapse of which pushed the Liberals into opposition in June. The Social Liberals formed a new ruling majority with the Social Democrats.
At the time, Arturas Paulauskas, leader of the Social Liberals, and President Valdas Adamkus wanted to replace Paksas as prime minister with Gentvilas. But Paksas refused to go, and the coalition collapsed.
MP Alvydas Medalinskas was one of the few Liberal leaders who defended Paksas. "Paksas resigned as prime minister because our partners, the Social Liberals, decided to form a coalition with the Social Democrats. The Social Democrats could have taken power whenever they wanted to. In early summer, they were already controlling Parliament with the unofficial support of the Social Liberals, and Paksas' government had no real power. The Social Democrats decided to take power when Lithuania's economy began to grow," he told The Baltic Times.
He suggested that the Social Democrats would in future present the current rise in the economy, initiated by Paksas' government, as their own achievement.
Political analysts agree that there are no ideological differences between Gentvilas and Paksas. This is a clash of personalities. Adamkus considers Gentvilas as being a more decisive character.
The president is obliged by the Lithuanian constitution to be a non-party man. However, Adamkus does not conceal his support for the Liberal Union. He is also godfather to Zuokas' son Domas.
Gentvilas is one of the founding fathers of the Liberal Union, which he headed until ceding the post to Paksas in 1999. This move raised the party's profile considerably in the run-up to the parliamentary elections of the fall of 2000. Paksas had just left the Conservatives, a party on a downhill slide, and was enjoying considerable popularity.
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