INDONESIAN President Suharto finally resigned this morning.

It was also reported that 11 Cabinet Ministers, including top economics minister Ginandjar Kartasasmita, had submitted a joint resignation letter.

Washington had earlier demanded that Suharto quit on the day that he put 150,000 troops on the streets of his capital to prevent a million-strong demonstration against his autocratic rule, turning Jakarta into a virtual prison camp.

In a speech in New London, Connecticut, Secretary of State Madeleine Albright had increased pressure on Suharto, with whom US administrations have had little dispute during his 32 years in power.

She said: ''Now he has an opportunity for an historic act of statesmanship.''

By stepping down, Albright said, Suharto would ''preserve his legacy as a man who not only led his country, but provided for its democratic transition''.

She also urged him to exercise restraint in dealing with millions of demonstrators throughout the South-east Asian country who are calling for his resignation.

A senior US official said while Albright did not directly call for Suharto's resignation, that was the point of her statement.

''President Suharto's recognition that wide-ranging political reform is necessary is long overdue,'' said State Department spokesman James Rubins, who added that the administration hoped Suharto's words would lead to a genuine dialogue as quickly as possible.

The US has long admired what it perceived as the constructive role Suharto has played in South-east Asia, but support for him in Washington has waned as he appeared to lose the confidence of his countrymen.

In Jakarta, Amien Rais, Indonesia's most prominent Suharto critic, had revealed that ''a goverment friend'' had confirmed that Suharto would resign today and that a transitional government under Vice President Habibie would be set up to prepare for new parliamentary elections within six months.

''It is time for us to say goodbye to our national leader who has for 32 years has ruled the country,'' Rais said early today.

Outside Parliament, some 150,000 troops poured into the streets, helicopters swooped overhead, and tanks lined up beside coiled wire and wooden barricades in a last potent show of support for the 76-year-old autocrat.

''Stability in the city is a top priority. We are preventing any trouble,'' said Jakarta military commander Major General Syafrie Syamsudin.

Protests have rocketed since the government imposed IMF-mandated austerity measures this month in an attempt to stem Indonesia's worst economic crisis in decades. Last week, Jakarta was rocked by rioting, looting, and arson in which more than 500 people, including two Britons, were killed.

Despite the overwhelming military presence yesterday in Jakarta, 10,000 students swarmed over Parliament, turning the formal complex into the site of a wild street party.

Some danced in the main assembly hall, waded in a ceremonial pool, or climbed the roof. Others broke into offices. Official papers were torn up or made into paper planes and dropped from balconies.

''Freedom!'' some yelled. ''Hang Suharto!'' others shouted.

Rais received a tumultuous welcome from the students, making it clear that he was now the focal point of anti-Suharto dissent.

Rais accused the military yesterday of being ready to tolerate a ''Tiananmen'' situation - a reference to the massacre of hundreds of pro-democracy students by Chinese troops in Beijing's main square in 1989.

Jakarta residents faced another looming problem: food shortages. Stores and markets have been shut for days, many of them burned or looted in last week's riots.

Dozens of stores have been burned or looted, particularly those owned by the ethnic Chinese minority, which has been targeted as scapegoats for economic hard times.

The government said its state-controlled rice supplies remained adequate, but cited problems with distribution.

Foreigners continued to flee the unrest in Jakarta, with 360 Britons arriving at Heathrow on a special emergency flight. Malaysia tightened security along its border with Indonesia.

Suharto announced on Tuesday that he would end his 32-year rule - but only after pressing through reforms and holding new elections. State secretary Saadilah Mursid said a reform council would be announced today to draft new electoral laws and review the structure of Parliament.

Opponents say completing Suharto's reform plan could take months or longer.

Suharto, a retired general, came to power in time of turmoil in 1966 and has governed with little toleration for dissent ever since.

Critics accuse him of widespread human rights abuses and of lording over a regime riddled with corruption and nepotism.-AP