Susan Sim, Jakarta – The leader of Indonesia's second-largest Islamic organisation has resigned from his post in a Suharto-linked Muslim association amidst talk that he had angered the President with his criticism of the government's handling of the Busang gold find and the activities of American mining company Freeport.

Sources told The Straits Times that at a special plenary meeting yesterday that lasted almost five hours, the Association of Indonesian Muslim Intellectuals (ICMI) accepted Mr Amien Rais' resignation as chairman of its board of experts.

Mr Rais, the leader of Indonesia's most progressive Islamic organisation, the 28-million-strong Muhammadiyah movement, and a founder member of the six-year-old ICMI, had in the last few weeks repeatedly criticised President Suharto's New Order government and its economic policies.

In an recent interview with a local news magazine, he had described the government's concessions towards Freeport McMoRan Copper and Gold, the largest American investor in the country with extensive operations in Irian Jaya, as "unconstitutional" because they benefited only the company and not Indonesians.

He was similarly critical of the government's original decision to allow foreign investors majority stakes in a gold mining project in East Kalimantan.

In a deal finalised last week, Indonesian interests emerged with a 40 per cent stake in a joint venture with Canadian company Bre-X and Freeport.

Sources close to Mr Rais told The Straits Times last week that he was interviewed by officials from the Attorney-General's office in Yogyakarta, where he is a professor at the University of Gajah Madah, soon after the interview was published.

On February 8, the Islamic scholar was summoned to a meeting in Jakarta with ICMI chairman, Research and Technology Minister B. J. Habibie.

The sources said that the minister, a close Suharto confidant, held an hour-long meeting with him, where Mr Rais was given to understand that his comments had upset the palace greatly and that given his position in ICMI, his comments might be misunderstood as reflecting the group's views.

Mr Rais then offered to step down from the council and tendered his resignation two days later, the sources said.

Although news of his ICMI resignation leaked last week, the Muhammadiyah leader refuted them, insisting that it was "impossible" for him to resign. On Saturday, he again denied rumours that Prof Habibie had demanded his resignation.

The ICMI leader told reporters that the resignation was not politically motivated nor connected to the Muslim scholar's criticism of the government. Mr Rais, he said, had wanted to resign as chairman of the ICMI board of experts since last year because the panel had not been productive.

Asked to comment on speculation that other ICMI activists close to Mr Rais would also be forced to resign, Prof Habibie was quoted by Antara national news agency as saying: "No one has called for, ordered or requested the resignation of Amien Rais, Parni Hadi, Adi Sasono and Jimly Asshidique. What happened was that Amien Rais resigned because of technical reasons."

Mr Sasono is the group's secretary-general, Mr Parni is the chief editor of the Republika daily, the group's newspaper, while Mr Asshidique is an official in the Ministry of Education and Mr Sasono's rival at the 1995 congress. Their positions are believed to be secure.

Analysts said that given Mr Rais' increasingly strident comments about the government, his departure from the ICMI council would "save" the group from being seen as an opposition body.