Akayev, who had ruled the mountainous, mostly Muslim nation of five million for almost 15 years, fled to Moscow last month when thousands of protesters, angered by a flawed parliamentary poll, ransacked his offices and the opposition seized power.

Although he signed a resignation letter in Moscow last week, he remained technically in power until the parliament vote.

The likely two leading candidates to become the ex-Soviet state's next leader are acting President Kurmanbek Bakiyev, a former prime minister from the south of Kyrgyzstan, and Felix Kulov, a former security services chief from the north.

Kulov, sprung from jail during two days of chaos and violence that followed Akayev's ouster, had been jailed under Akayev's rule on corruption and abuse of power charges that he said were politically motivated.

The Supreme Court overturned the corruption charges on Monday, following a ruling last week annulling the abuse of power verdict, freeing him to run for office.

But there have been fears that a race between one opposition leader representing the north and the other the poorer south -separated by mountains and ethnic differences - could prove divisive in a state which saw ethnic clashes in the early 1990s.

Clashes fear

"The presidential election is a complicated problem for me," Kulov told reporters after Monday's ruling.

There are fears of ethnic clashes
in the impoverished country

"In order that my decision does not have any undesirable consequences it is necessary to carefully talk it over with Kurmanbek Saliyevich (Bakiyev). After that I'll take a decision (on whether to run)," he said.

In parliament, 38 deputies - the smallest possible majority in the 75-seat house - passed a motion accepting Akayev's resignation. The legislature is a controversial body after the poll which the opposition accused Akayev of using to stuff the house with his cronies.

Some candidates have not taken up their seats, including Akayev's son and daughter who also fled the country, and it failed for four consecutive days last week to accept Akayev's resignation.

OSCE criticism

The Organisation for Security and Cooperation in Europe (OSCE), which criticised the parliamentary poll, had said the delays were harming stability. It had also urged a speedy decision on the Kulov case for the sake of stability.

Kulov, an energetic 55-year-old popularly dubbed "a people's general", left the court after his acquittal to applause from more than 1000 of his supporters gathered outside.

"The presidential election is a complicated problem for me"

Opposition leader Felix Kulov

A brass band played World War Two melody This victorious day, and some of his supporters showered sweets on Kulov - a traditional Kyrgyz wish of luck and prosperity.

Kulov was sentenced to a seven year term in early 2001, but was sprung from jail during a lightning coup and street protests in the ex-Soviet state on 24 March.

The plain-speaking former police chief was credited with ending two days of looting in the capital Bishkek after the coup, but resigned as security chief in the opposition-led interim administration once order was restored.

In a sign of continuing instability, a close Kulov supporter and famous Kyrgyz stuntman Usen Kudaibergenov was found shot and killed at his home on Sunday. Kudaibergenov helped restore order in Bishkek after the coup.