More than a third of South Africa's Cabinet stepped down yesterday out of loyalty to ousted President Thabo Mbeki, deepening the biggest political crisis since the end of apartheid.
The exodus included highly respected Finance Minister Trevor Manuel, immediately shaking markets, but they partly recovered when he said he would be happy to serve a new president.
The resignations, which included Defence Minister Mosiuoa Lekota and Public Enterprise Minister Alec Erwin, further rattled foreign investors worried by Sunday's resignation of Mr Mbeki, who presided over the longest period of growth in Africa's biggest economy.
The demise of Mr Mbeki was the climax of a long and bitter battle with Jacob Zuma - who toppled him as ANC leader in December - which has seriously split the formerly monolithic party.
Parliament is expected tomorrow to appoint ANC deputy leader Kgalema Motlanthe as interim President until a general election next year, which Mr Zuma is widely expected to win.
Mr Mbeki's resignation followed accusations, which he denies, of meddling in a long running graft case against his rival. Despite Mr Manuel's statement, the resignation of 10 ministers and the Deputy President out of a Cabinet of 30 stoked fears of political instability.
The rand currency tumbled on news Mr Manuel had resigned but recovered most of its losses after his statement.
Shares recovered some losses attributed to the original announcement but fell again later due to global financial worries and continuing political uncertainty.
Seeking to ease concerns over instability, ANC Secretary-General Gwede Mantashe told a news conference the party "will ensure that there is continuity in government up to and beyond the 2009 election".
Acute market sensitivity to Mr Manuel's fate highlights the challenge facing the ANC, which wants to reassure investors it can manage the economy while being pushed by radical and leftist allies to do more to help the army of poor and unemployed.
The failure to adequately spread the benefits of black rule to the poor is a major cause of Mr Mbeki's unpopularity. Mr Manuel told a hastily convened press conference in Washington: "I am happy to serve a new head of state". His statement raised questions over how the resignation announcement was handled by Mbeki's office.
Several analysts criticised the way in which Mr Manuel's resignation was initially announced without mentioning his willingness to serve under another President.
Ratings agency Fitch also expressed concern over the way the resignations were handled.
Mr Zuma has tried to reassure foreign investors he will not bow to pressure from trade union allies to shift away from Mr Mbeki's business-friendly policies. But analysts say leftist elements within the ANC have been gaining ground.
Mr Zuma on Monday made clear his backing for Mr Motlanthe, a quiet intellectual widely respected across the ANC, and pledged the party would ensure a smooth transition and unchanged economic policy.