Angry and upset Congress parliamentarians, who made more than three hours of speeches, some tearful, mobbed and begged her to reconsider but Sonia refused to budge.

"I must humbly decline this post," she told an uproarious meeting of lawmakers from her Congress party. Sonia faced staunch protests by Hindu hardliners who were against having a foreign-born prime minister.

Emotional Congress MPs forced party leader Pranab Mukherjee to change a party statement that would have asked Sonia to submit another name for prime minister. Instead, the statement called for Sonia to reconsider.

"I have listened to your views, your pain and anguish on the decision I have taken. I am aware that I am causing anguish to you but I think if you trust me, allow me to take my decision," Sonia said.

Fighting to make herself heard above indignant shouts from her supporters, she said: "I request you to accept my decision and to recognise that I will not reverse it."

"It is my inner voice, my conscience," said Sonia, 57-year-old widow of murdered former prime minister Rajiv Gandhi.

Some MPs said they would rather resign than not be led by Sonia, who engineered a come-from-behind defeat of the Hindu nationalist government. MPs disrupted Sonia when she tried to speak or slumped in their seats.

In the southern territory of Pondicherry, local Congress lawmakers threatened to resign in bulk if their party president did not change her mind.

Sonia gave no immediate public signal as to who she wished to head the new government. But the NDTV network said Gandhi was pushing former finance minister Manmohan Singh.

"The post of prime minister has not been my aim," Sonia told incoming MPs of her party.

"I must abide by the principles that have guided me all alone. I appeal to you to understand the force of my conviction," she said.

"There is no threat to me from anywhere. I want to give India a secular government that is strong and stable.

"My aim has always been to protect the secular foundations of our nation."

"We have waged a successful battle but we have not won the war. That is a long and arduous struggle and I will continue it with full determination."

The withdrawal by the heir of the Nehru-Gandhi dynasty -- India's equivalent of America's Kennedys -- had earlier triggered anguished scenes outside her New Delhi home as hundreds of supporters rallied to press her to change her mind.

One man stood on the roof of a car, held a homemade gun to his head and waved a stick to deter people trying to calm him.

"Call Sonia Gandhi! Tell her I will kill myself if she doesn't become prime minister!" he said before being disarmed.

Others lay down in the street or torched effigies of Sonia's Hindu nationalist opponents, who have run a bitter campaign targeting her Italian background after their humiliating election loss last week.

"Congress has informed us that Mrs Gandhi will no longer be leader of the Congress Parliamentary Party, and they are meeting to elect a new leader," said Sitaram Yechuri, a leader of the main Communist Party of India (Marxist), which has pledged its support to a Congress coalition government.

LAWMAKERS MEET
Congress leaders had made frantic last minute efforts to persuade Sonia to stay on and become India's first foreign-born prime minister and the fourth from the Nehru-Gandhi clan.

Her withdrawal, and the prospect of Singh leading Asia's third-largest economy, spurred markets, helping stocks on the Bombay exchange post their second-biggest daily rally just a day after the worst plunge in the exchange's 129-year history.

At Sonia's residence, Congress leaders, some beating their chests, urged her to ignore what they called the ousted Bharatiya Janata Party's "racist" campaign.

"She feels the country comes first, she does not want the country to be faced with this," said Congress official Salman Khursheed. "We are stunned, it is shocking, I just can't see the Congress party accepting such an outcome."

Left-wing parties, with more than 60 seats, were supporting Sonia without formally joining her coalition, but have spooked markets with anti-privatisation comments.

As news of Sonia's possible withdrawal filtered out, the stock market rebounded sharply and recorded one of its biggest gains.

"The market has gone up because of news that Sonia is reluctant to be PM," said Bharat Shah, director of Vikram Kenia Securities. "This means that Manmohan Singh, who is very reformist, will become prime minister."

Sonia, an Indian citizen, and Singh met President Abdul Kalam earlier yesterday to open talks about forming government. Sonia said later she would meet Kalam again today.

Kalam invited Sonia to meet him as leader of the biggest party in the new parliament and is likely to accept Congress' claim to power in the world's largest democracy.

(Reuters, AFP and BBC)