Belgium's third political breakdown in a year was prompted by a Supreme Court report on political meddling in a legal case over the rescue of stricken bank Fortis, and made more intractable by differences between the country's Dutch- and French-speaking communities.

'The king charged him with an exploratory mission so as to find a solution quickly to the current political crisis,' the palace said in a statement, adding that Mr Martens, 72, had accepted the job. Mr Martens led Belgium between 1979 and 1992.

The king accepted the resignation of Mr Leterme's government earlier in the day but asked it to stay on in a caretaker capacity.

Mr Leterme ruled out a return to office, but there was little sign that the five coalition parties would agree on a successor.

Mr Martens brings to the task a wealth of experience in political turbulence, having led nine separate governments from 1979 to 1992 and having had to confront the sharp economic downturn of the early 1980s.

'He must explore the scene and see what the solutions might be. It shows how difficult the situation is. It doesn't seem so good,' said Professor Carl Devos, political scientist at Ghent University.

'After him, there should be someone come to form a government.'

Mr Jean-Luc Dehaene, prime minister from 1992 to 1999, emerged on Monday as the most likely candidate to head an interim government until June 2009, when parliamentary elections could be held to coincide with planned regional and EU votes.

'He has the experience, he's been prime minister and would be an effective crisis manager,' Prof Devos said.

Recession, Fortis are challenging
The new leader will have plenty of problems to solve.

Belgium, host to Nato and the European Union, is expected to slide into recession this quarter and urgently needs to enact a 2 billion euro (S$4 billion) recovery package and a deal on wages, as well as find a solution to the Fortis debacle.

Fortis investors, whose shares have dropped to around 1 euro from almost 30 euros in April 2007, have successfully challenged the group's state-led break-up and asset sale to France's BNP Paribas and want the deals to be renegotiated.

The liberals have deep reservations over 68-year-old Dehaene, who became chairman of Fortis's rival Dexia after the Franco-Belgian group's bailout in October, arguing that he is too left-wing.

Other possible successors include the president of the lower house of parliament, Mr Herman Van Rompuy, Guy Verhofstadt, the former prime minister brought back by the king last year, and outsiders Finance Minister Didier Reynders and Ms Marianne Thyssen, head of the Flemish Christian Democrats.

Belgium has lurched from crisis to crisis since the June 2007 general election, mainly because of Leterme's failure to broker a deal between Dutch-speaking parties that want more powers for Flanders and French speakers who fear such a move would pull Belgium apart.

Previous crises sparked media speculation that the 178-year-old nation could break in two. The devolution issue is set to flare up again in the runup to the June elections. -- REUTERS