Reuters in United Nations – Xanana Gusmao, the popular East Timorese resistance leader, said overnight he would not be a candidate for president when the former Portuguese colony achieves independence next year.

Instead, Mr Gusmao said he could do more good from outside the government to help East Timor make the transition to an independent democratic country. The territory, now under UN administration, was invaded by Indonesia in 1974 after Portugal withdrew.

"It is only a myth that a leader of the resistance has to be the first president," he told a news conference with his Australian-born wife and six-month son by his side. "I commit myself to help the process but not from the inside."

Referring to his years as a guerilla leader against Indonesian rule, Mr Gusmao quipped: "I am not an expert at anything – except perhaps how to kill enemies."

Associates said he had never aspired to the presidency since his release in 1999 from seven years imprisonment in Indonesian jails, believing he could do more to unite people from outside the system than within.

But as leader of the resistance, he emerged as a hero to most Timorese. Mr Gusmao, citing political disagreements, last month resigned as head of East Timor's National Council, a legislative and consultative body appointed by the United Nations. The council is to be dissolved in June ahead of August 30 elections to choose a new legislative body that will draw up a national constitution. Presidential elections will then be held and East Timor is expected to achieve independence in the first half of 2002.

Mr Gusmao said he was critical of the UN Administration in East Timor, known as Untaet, for not focusing enough on "capacity building" or preparing East Timorese for independence. But he said he was aware it was the first time the world body was involved in such an extensive undertaking.

His wife, Kirsty Sword Gusmao, explained later that a Timorese government would not have much room to maneuver in the early years of independence. Politics, she said, would be determined by financial institutions, such as the International Monetary Fund and the World Bank, whose help is badly needed in the impoverished half-island.

Although there was pressure on Mr Gusmao to become the country's new leader, he felt he could urge people to be patient and calm if he were outside the system. "If he says it from the inside, he can be accused of enjoying privileges and not be taken seriously," she said.

As Mr Gusmao held his press conference, the UN Security Council, one floor, below conducted an open briefing on East Timor. British Ambassador Sir Jeremy Greenstock said Mr Gusmao's resignation was "of some concern" but it was "very important" he continued contributing to national affairs.

Hedi Annabi, the assistant secretary-general for peacekeeping who just returned from a trip to East Timor, said the schedule for elections could only be kept if voter registration was completed by June 24.

An estimated 100,000 men, women and children will not be in East Timor for the poll. Many are still in captivity in neighboring Indonesian West Timor. They were taken there by armed gangs organised by the Indonesian army after East Timorese voted for independence in a UN-organised poll. Mr Annabi said he was pleased by recent increases in the number of returning refugees. But he noted 100,000 people were still subject to intimidation and propaganda by militia across the border in West Timor.