The unassuming Singh, who started India's free-market reforms in 1991, has been front-runner to lead the world's most populous democracy since Sonia, widow of assassinated former prime minister Rajiv Gandhi, stepped aside on Tuesday to protect Congress from a damaging campaign over her foreign birth.

"I am told individual members are being asked to support a resolution for Manmohan Singh," a Congress leader told Reuters.

"He is the automatic choice if Sonia does not accept."

In another twist, senior leaders of the Congress party quit their party posts in an attempt to pressure Gandhi to reconsider her decision in turning down the prime minister's job.
 
Congress was likely to inform President Abd al-Kalam later on Wednesday it was ready to form a new government, a key ally said.

Al-Kalam's approval to a Congress government is considered a formality. The nation's oldest party is assured of the support of more than 320 members of the new 545-seat parliament after a general election that saw the defeat of the ruling Hindu nationalist-led coalition.
 
"The claim would be made by the end of the day," Sitaram Yechury, a spokesman for the Communist Party of India (Marxist) told reporters after meeting Gandhi.

Anti-reform comments
 
India's markets, spooked by anti-reform comments by left-wing parties supporting Congress without formally joining its coalition, welcomed Singh's possible rise to power. He would become India's first Sikh prime minister.

Gandhi (L) remains adamant she
will not reverse her decision

Indian financial markets rose for a second straight day on hopes the reformist Singh will take over as the prime minister of Asia's third-largest economy.

The main stock index was up 1.93% at 4971.46 at 0748 GMT, extending on Tuesday's 8% rise and well above an intra-day low of 4277.50 hit during a record rout on Monday.

The scholarly Singh commands respect for his integrity and intellect. But he will need sharp political skills to manage party leaders - who have looked only to the Nehru-Gandhi dynasty to lead - and disparate allies with their competing demands.

"The father of India's reform programme rising to the prime ministership would be very positive from the standpoint of the market," said PK Basu, head of Robust Economic Analysis.

"But I would caution against excessive euphoria since Doctor Singh as an economic reformer is well regarded, but his abilities as a political manager are untested."

'Racist' campaign

The Communist Party of India (Marxist), which has pledged support to a Congress-led government coalition, said the overriding concern was to stop Hindu nationalists from returning to power and it would support even Singh, who launched the free-market reforms in 1991.

Congress party supporters say
Gandhi should be leading India

"He is one of the most decent persons, a knowledgeable economist and I will opt for him any time over any person in the Bharatiya Janata Party," said communist Somnath Chatterjee.

But hundreds of Congress workers continued a vigil outside Gandhi's heavily guarded New Delhi home urging her to disregard, what they said was a "racist" campaign against her by Hindu nationalists and agree to lead the nation.

"It is a difficult situation, Congress workers are not in a mood to listen," said Ambika Soni, a Congress spokeswoman and a Gandhi adviser. "But Sonia is equally adamant."

Newspaper pundits said Gandhi's decision to step aside had sent her stock sky-high and the Hindu nationalist BJP which had been attacking her foreign birth was looking foolish and petty.
 
'No reversal'

"By choosing to humbly decline to take up the prime minister's post she has played a masterstroke. She has neatly disarmed her political opponents of the one weapon they had opted to use against her"

Indian Express newspaper

"Amazing Grace" said a headline in the Hindustan Times about Gandhi's decision, adding that it would be rare to find an Indian politician turn away from power.

"By choosing to humbly decline to take up the prime minister's post she has played a masterstroke, " the Indian Express said. "She has neatly disarmed her political opponents of the one weapon they had opted to use against her."
 
The BJP renewed a campaign against Gandhi after the election, saying her foreign birth disqualified her from holding the office of prime minister.

The Indian constitution does not ban a foreign-born individual from holding the office.

Gandhi would have been India's first foreign-born prime minister and the fourth from the Nehru-Gandhi clan after founding leader Jawaharlal Nehru, his daughter Indira and her son Rajiv.

"I request you to accept my decision and to recognise that I will not reverse it," Gandhi told a Congress meeting in parliament's central hall on Tuesday night.