Ukraine govt resigns, stays on in acting role

Ukraine's Prime Minister Mykola Azarov addresses the audience at the pro-President Yanukovich Regions Party's election headquarters in Kiev, October 28, 2012.

KIEV (Reuters) - Ukrainian President Viktor Yanukovich on Monday accepted the resignation of Prime Minister Mykola Azarov and his government and told the cabinet to stay on in an interim capacity, according to a decree published on the presidential website.

A number of government members, including Azarov, were elected to parliament in an election on October 28 and had been expected therefore to resign from their cabinet posts.

In his two and a half years as prime minister, Azarov has sought to revive an indebted economy which was hard hit by recession in 2009.

But growth rates have fallen again this year as markets for main exports, such as steel, have shrunk.

He has also been at the forefront of tough - and so far unsuccessful - negotiations with Russia, Ukraine's main energy provider, to try to persuade Moscow to bring down the price of strategic supplies of natural gas which the government says are way above market price and are a huge drain on the economy.

Yanukovich now has the option of re-appointing Azarov and individual ministers if he chooses.

If he decides to discard Azarov, he might choose to replace him with central bank chief Serhiy Arbuzov, with whom Yanukovich is personally close, commentators say.

(Writing by Richard Balmforth; Editing by Olzhas Auyezov)