US sequester cuts will force major flight delays

WASHINGTON: US Transportation Secretary Ray LaHood said Friday that looming automatic budget cuts will force air traffic control cutbacks and cause flight delays in major cities by up to 90 minutes.

LaHood said the US$85 billion "sequester" cuts scheduled for March 1 will compel the Federal Aviation Administration to reduce airport staffing around the country, shutting towers at smaller airports and causing a general slowdown of civil aviation operations.

"Sequester will have a very serious impact on the transportation services that are critical to the traveling public and to the nation's economy," LaHood told reporters at the White House.

At the department of transportation, he said, spending will be reduced by nearly US$1 billion, including US$600 million at the FAA for the March-September period.

That means the FAA will furlough -- mandate unpaid leave -- most of its 47,000 workers for between two and four days each month beginning in April, LaHood said.

That will mean less air traffic control services at large and small airports around the country, likely forcing flight schedule changes and slowdowns by airlines.

"Once airlines see the potential impact of these furloughs, we expect that they will change their schedules and cancel flights."

"Obviously, as always, safety is our top priority, and we will never allow the amount of air travel we can handle safely to take off and land -- which means travellers should expect delays," LaHood warned.

In a letter to airline and airport managers around the country, LaHood said the cutbacks will mean the elimination of midnight shifts in 30 secondary airports like El Paso, Texas and Chicago's Midway, and the closure of traffic control towers at 100 smaller airports.

The FAA will have to reduce equipment maintenance and support as well.

As a consequence, "travellers should expect delays," he said in the letter.

"Flights to major cities like New York, Chicago and San Francisco could experience delays of up to 90 minutes during peak hours because we will have fewer controllers on staff."

The sequester -- harsh automatic spending cuts over 10 years agreed in a 2011 political deal to force deficit reduction -- will take effect on March 1 if Democrats and Republicans cannot compromise on a less austere program before then.

President Barack Obama wants to replace the cuts with a balanced set of spending cuts and revenue hikes obtained by closing tax loopholes, but Republicans in Congress are resisting the idea of higher taxes.

- AFP/jc

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Indian Mujahideen shows yet again that it is alive and kicking

NEW DELHI: Indian Mujahideen, Pakistani terror outfit Lashkar-e-Taiba's proxy in India, may have been down after the August 2012 Pune serial blasts but it's certainly not out as it has the capacity to regroup after every clampdown. The Hyderabad incident has once again proved that the banned group is not only alive but also kicking through its potent sleeper cells in different states.

Getting continuous support from the Pakistani spy agency ISI, the outfit has enough resources to make its presence felt at regular intervals through attacks in different cities. Its supply lines of explosives, detonators and micro chips are intact and it can attack anywhere in the country with as much ease as it did during its peak in 2007-08 when it carried out blasts in Lucknow, Faizabad, Varanasi, Jaipur, Ahmedabad and Delhi.

A Delhi Police dossier, prepared after last year's Pune blasts and shared with the home ministry in September, shows that the terror outfit has modules in Andhra Pradesh, Uttar Pradesh, Madhya Pradesh, Bihar, Gujarat, Maharashtra, Karnataka, Kerala and Delhi where it recruited cadre during the lull of 2009. It came to action again in 2010 when it attacked German Bakery in Pune and carried out a shootout and blast outside Jama Masjid in Delhi.

The dossier, shared with all states, says the IM's top leaders - Amir Raza Khan and Bhatkal brothers (Iqbal and Riyaz) - are currently in Pakistan while others have safe hideouts in Saudi Arabia, Nepal and the UAE (Dubai and Sharjah). Khan and the Bhatkal brothers were among the founding members of the outfit which later took in its fold almost all the cadres of Students Islamic Movement of India (SIMI).

The dossier says that IM - which was set up by ISI to camouflage its own footprint and project to the world that Islamic terrorism in India was indigenous in character and content - has "substantial corpus of money", having funding sources based in Kuwait, Riyadh, Chicago and different cities in Pakistan.

Even though a number of operatives were arrested in 2011-12 by Delhi, Maharashtra and Gujarat police, 15 key absconders - Yasin Bhatkal, Shahnawaz, Abu Rashid, Abdus Subham Qureshi, Tehsin and Mirza Shadab Bai among them - have been carrying out operations under the guidance of their bosses in Pakistan.

Calling IM a "start to finish jihad factory", the dossier highlighted that "innocuous religious platforms" like Quran Foundation, Pune and Islamic Guidance Centre, Mangalore were among institutions from where foot soldiers were recruited, which included disenchanted Muslim youth ranging from petty criminals to highly paid software professionals. It noted how the outfit had recruited its prized operative -- Mansoor Ali Mohammed Peerbhoy -- while he was studying Arabic at the Quran Foundation.

Peerbhoy, a Yahoo techie-turned-media chief of the terror outfit who was arrested in 2008, had brought in a number of educated youth to the IM's fold. Recruitments of Arif Badar, IED assembly and micro chip-based timer expert, and Mobin, internet hacking expert, were testimony of how talented ones were identified and trained as terrorists through fiery and emotive 'taqrirs' (speech) and attitude hardening 'dars' (lessons).

It was noted that "brainwashing through doctored pictorials and videos, such as that of Godhra and Babri Masjid incidents" was very common in these 'taqrirs' and 'dars'.

Use of 'social networking sites' for sending personalized messages and motivating vulnerable youth had also come to the notice of investigating agencies, prompting them to suggest setting up "massive and sophisticated surveillance infrastructure" in the country.

Though the IM came to notice for the first time when it sent emails to media houses before the serial blasts in Faizabad, Lucknow and Varanasi in Uttar Pradesh in November 2007, its genesis - the dossier says - goes back to the year 2000 when the underworld network was roped in to organize talent spotting, motivation and training of Indian youth at the facilities of LeT and ISI.

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FDA approves new targeted breast cancer drug

WASHINGTON (AP) — The Food and Drug Administration has approved a first-of-a-kind breast cancer medication that targets tumor cells while sparing healthy ones.

The drug Kadcyla from Roche combines the established drug Herceptin with a powerful chemotherapy drug and a third chemical linking the medicines together. The chemical keeps the cocktail intact until it binds to a cancer cell, delivering a potent dose of anti-tumor poison.

Cancer researchers say the drug is an important step forward because it delivers more medication while reducing the unpleasant side effects of chemotherapy.

"This antibody goes seeking out the tumor cells, gets internalized and then explodes them from within. So it's very kind and gentle on the patients — there's no hair loss, no nausea, no vomiting," said Dr. Melody Cobleigh of Rush University Medical Center. "It's a revolutionary way of treating cancer."

Cobleigh helped conduct the key studies of the drug at the Chicago facility.

The FDA approved the new treatment for about 20 percent of breast cancer patients with a form of the disease that is typically more aggressive and less responsive to hormone therapy. These patients have tumors that overproduce a protein known as HER-2. Breast cancer is the second most deadly form of cancer in U.S. women, and is expected to kill more than 39,000 Americans this year, according to the National Cancer Institute.

The approval will help Roche's Genentech unit build on the blockbuster success of Herceptin, which has long dominated the breast cancer marketplace. The drug had sales of roughly $6 billion last year.

Genentech said Friday that Kadcyla will cost $9,800 per month, compared to $4,500 per month for regular Herceptin. The company estimates a full course of Kadcyla, about nine months of medicine, will cost $94,000.

FDA scientists said they approved the drug based on company studies showing Kadcyla delayed the progression of breast cancer by several months. Researchers reported last year that patients treated with the drug lived 9.6 months before death or the spread of their disease, compared with a little more than six months for patients treated with two other standard drugs, Tykerb and Xeloda.

Overall, patients taking Kadcyla lived about 2.6 years, compared with 2 years for patients taking the other drugs.

FDA specifically approved the drug for patients with advanced breast cancer who have already been treated with Herceptin and taxane, a widely used chemotherapy drug. Doctors are not required to follow FDA prescribing guidelines, and cancer researchers say the drug could have great potential in patients with earlier forms of breast cancer

Kadcyla will carry a boxed warning, the most severe type, alerting doctors and patients that the drug can cause liver toxicity, heart problems and potentially death. The drug can also cause severe birth defects and should not be used by pregnant women.

Kadcyla was developed by South San Francisco-based Genentech using drug-binding technology licensed from Waltham, Mass.-based ImmunoGen. The company developed the chemical that keeps the drug cocktail together and is scheduled to receive a $10.5 million payment from Genentech on the FDA decision. The company will also receive additional royalties on the drug's sales.

Shares of ImmunoGen Inc. rose 2 cents to $14.32 in afternoon trading. The stock has ttraded in a 52-wek range of $10.85 to $18.10.

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Jodi Arias' Friends Believe in Her Innocence

Accused murderer Jodi Arias believes she should be punished, but hopes she will not be sentenced to death, two of her closest friends told ABC News in an exclusive interview.

Ann Campbell and Donavan Bering have been a constant presence for Arias wth at least one of them sitting in the Phoenix, Ariz., courtroom along with Arias' family for almost every day of her murder trial. They befriended Arias after she first arrived in jail and believe in her innocence.

Arias admits killing her ex-boyfriend Travis Alexander and lying for nearly two years about it, but insists she killed Alexander in self defense. She could face the death penalty if convicted of murder.

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Nevertheless, she is aware of the seriousness of her lies and deceitful behavior.

The women told ABC News that they understand that Arias needs to be punished and Arias understands that too.

"She does know that, you know, she does need to pay for the crime," Campbell said. "But I don't want her to die, and I know that she has so much to give back."

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The lies that Arias admits she told to police and her family have been devastating to her, Bering said.

""She said to me, 'I wish I didn't have to have lied. That destroyed me,'" Donovan said earlier this week. "Because now when it's so important for her to be believed, she has that doubt. But as she told me on the phone yesterday, she goes, 'I have nothing to lose.' So all she can do is go out there and tell the truth."

During Arias' nine days on the stand she has described in detail the oral, anal and phone sex that she and Alexander allegedly engaged in, despite being Mormons and trying to practice chastity. She also spelled out in excruciating detail what she claimed was Alexander's growing demands for sex, loyalty and subservience along with an increasingly violent temper.

Besides her two friends, Arias' mother and sometimes her father have been sitting in the front row of the courtroom during the testimony. It's been humiliating, Bering said.

"She's horrified. There's not one ounce of her life that's not out there, that's not open to the public. She's ashamed," she said.

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French, Malian forces fight Islamist rebels in Gao

GAO, Mali (Reuters) - French and Malian troops fought Islamists on the streets of Gao and a car bomb exploded in Kidal on Thursday, as fighting showed little sign of abating weeks before France plans to start withdrawing some forces.

Reuters reporters in Gao in the country's desert north said French and Malian forces fired at the mayor's office with heavy machineguns after Islamists were reported to have infiltrated the Niger River town during a night of explosions and gunfire.

French Defense Minister Jean-Yves Le Drian told a news conference in Brussels that Gao was back under control after clashes earlier in the day.

"Malian troops supported by French soldiers killed five jihadists and the situation is back to normal," he said.

In Kidal, a remote far north town where the French are hunting Islamists, residents said a car bomb killed two. A French defense ministry source reported no French casualties.

French troops dispatched to root out rebels with links to al Qaeda swiftly retook northern towns last month. But they now risk being bogged down in a guerrilla conflict as they try to help Mali's weak army counter bombings and raids.

"There was an infiltration by Islamists overnight and there is shooting all over the place," Sadou Harouna Diallo, Gao's mayor, told Reuters by telephone earlier in the day, saying he was not in his office at the time.

Gao is a French hub for operations in the Kidal region, about 300 km (190 miles) northeast, where many Islamist leaders are thought to have retreated and foreign hostages may be held.

"They are black and two were disguised as women," a Malian soldier in Gao who gave his name only as Sergeant Assak told Reuters during a pause in heavy gunfire around Independence Square.

Six Malian military pickups were deployed in the square and opened fire on the mayor's office with the heavy machineguns. Two injured soldiers were taken away in an ambulance.

French troops in armored vehicles later joined the battle as it spilled out into the warren of sandy streets, where, two weeks ago, they also fought for hours against Islamists who had infiltrated the town via the nearby river.

Helicopters clattered over the mayor's office, while a nearby local government office and petrol station was on fire.

A Gao resident said he heard an explosion and then saw a Malian military vehicle on fire in a nearby street.

Paris has said it plans to start withdrawing some of its 4,000 troops from Mali next month. But rebels have fought back against Mali's weak and divided army, and African forces due to take over the French role are not yet in place.

Islamists abandoned the main towns they held but French and Malian forces have said there are pockets of Islamist resistance across the north, which is about the size of France.

CAR BOMB

Residents reported a bomb in the east of Kidal on Thursday.

"It was a car bomb that exploded in a garage," said one resident who went to the scene but asked not to be named.

"The driver and another man were killed. Two other people were injured," he added.

A French defense ministry official confirmed there had been a car bomb but said it did not appear that French troops, based at the town's airport, had been targeted.

Earlier this week, a French soldier was killed in heavy fighting north of Kidal, where French and Chadian troops are hunting Islamists in the Adrar des Ifoghas mountains, which border Algeria.

Operations there are further complicated by the presence of separatist Tuareg rebels, whose rebellion triggered the fighting in northern Mali last year but were sidelined by the better-armed Islamists.

Having dispatched its forces to prevent an Islamist advance south in January, Paris is eager not to become bogged down in a long-term conflict in Mali. But their Malian and African allies have urged French troops not to pull out too soon.

(Additional reporting by Emanuel Braun in Gao, Adama Diarra in Bamako, David Lewis and John Irish in Dakar and Adrian Croft in Brussels; Writing by David Lewis; Editing by Jason Webb and Roger Atwood)

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Oil falls again on poor economic data, weak US crude demand

NEW YORK: Global oil prices fell more than $2 a barrel Thursday as traders worried over poor economic data, a potential end to US stimulus measures and signs of weaker-than-expected US crude demand.

A barrel of West Texas Intermediate crude for delivery in April dropped $2.38 to $92.84.

European benchmark Brent oil slid $2.07 to $113.53 a barrel.

It was the second day in a row in which crude prices fell sharply. Analysts said there was a general sense that the oil market has become too buoyant given the brittle state of the economy.

"The market had some vertigo at these high levels, and the market is now correcting," said Andy Lebow, senior vice president for energy futures at Jefferies Bache.

Fresh economic data suggested weaker economic conditions that could result in lower demand for petroleum. The US Labour Department said initial jobless claims rose to 362,000 in the week ending February 16, more than the analyst estimate of 358,000.

Meanwhile, a Markit report on the eurozone business activity showed its purchasing managers index hit a two-month low at 47.3 in February, down from 48.6 the previous month.

Lebow said the oil market was also watching the Federal Reserve for any potential shift in policy. Minutes released Wednesday by the Federal Reserve's Open Market Committee showed a vigorous debate on whether to continue a bond-buying program that many analysts believe has supported higher oil prices.

The US government's Department of Energy (DoE) Thursday announced that American crude inventories rose by 4.1 million barrels in the week ending February 15.

That was more than double market expectations for a gain of 1.7 million barrels, according to analysts polled by Dow Jones Newswires.

- AFP/fa

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Terror returns, again on cycle: 13 killed in Hyderabad twin blasts

HYDERABAD: It proved to a lull before a terrifying storm. Seventeen months after the last deadly bomb blast at the Delhi High court, two powerful bombs fastened to parked bicycles ripped through Hyderabad's bustling Dilsukhnagar area on Thursday, killing at least 13 persons and injuring 70 others. While no individual or group has claimed responsibility so far, intelligence officers insist that the deadly operation bears the stamp of Lashkar proxy, Indian Mujahideen.

Thursday's bombs triggered back-to-back explosions near popular movie theatres, blowing bodies into the air, flattening shops and houses and triggering panic among scores of injured people who were seen scurrying for cover in all directions with blood oozing out of their heads and legs.

The first bomb went off with a deafending blast near the Dilsukhnagar bus stop at 7.05pm, close to Venkatadri theatre and a minute later, another high intensity blast, near a snack shop close by, flung bodies into the air and left a crater on the tarmac, police and witnesses said. TV channels reported that an unexploded bomb was recovered from the area but there was no confirmation from the cops.

Six months ago, there were low-intensity blasts in Pune which fortunately claimed no casualty. Since the last blast in which people died was in September 2011 in Delhi, a perception of ebbing terror threat had grown which Thursday's Hyderabad bomb attacks have blown to smithereens. With finders being pointed at IM, it seems that terror operatives have regrouped now with deadly intent.

Immediately after the blasts at Dilsukhnagar on Thursday, terrified people ran from the blood-splattered area as glass shards and debris flew. They poured out into the narrow streets causing a stampede as people, including women carrying small children in the arms, ran for safety. Locals rushed to the aid of the injured, writhing and wailing with pain on the streets and sidewalks.

"For a second, I got blinded as there was smoke and darkness all around. Later, I heard women and children wailing around me," said Sudhakar Shetty, who survived the terror blasts with severe burns. "I was cooking in the kitchen of Mirchi Point (an eatery), and wanted to run out along with others but soon realized that I could not move as both my arms and legs were burnt," he said.

At least 25 people were initially rushed to the Osmania general hospital and 15 to the Yashoda hospital in Malakpet, police said. More were taken to two other hospitals. Two days of strike by nurses and group IV staff caught doctors at the emergency ward off guard and some patients even offered to help. But with the CT scan machine not functioning at the hospital, most of the injured could not be scanned for internal hemorrhage. The 108 ambulance service alone shifted 42 injured to various hospitals, an official said.

"I have counted at least nine bodies and many more are injured and crying for help," said a senior doctor at Osmania. Similar scenes were seen at Yashoda and Omni hospitals, where scores of injured were taken for treatment. Immediately after the blasts, phone lines got jammed and people left offices in a hurry, causing huge traffic jams all around. Many shops and business establishments downed their shutters.

Authorities were on high alert since Afzal Guru's hanging on February 9. Apart from Jammu & Kashmir, there were protests against the hanging in Hyderabad. The execution also triggered revenge threats from Pakistan-based militants and Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM) vowed renewed attacks on Indian cities. Members of the groups at a private gathering organised by the United Jihad Council in Pakistan, while paying tribute to Guru, had also vowed to step up their 'jihad' in Jammu & Kashmir.

It was the third time that Dilsukhnagar has been targeted by terrorists. In 2002, a bomb went off in a scooter parked near Sai Baba temple in the area, killing two people, while another bomb was defused near a foot overbridge in 2007, extremely close to the spot where Thursday's bombs were placed.

Prime Minister Manmohan Singh dispatched a National Security Guard team to the Hyderabad on a BSF aircraft to probe into the blast and immediately sanctioned Rs 2 lakh each to next of kin of those killed and Rs 50,000 each to those seriously injured. A National Investigation Agency, stationed in Hyderabad also joined the probe.

Hyderabad is not new to terror attacks as three previous blasts killed scores of people. The first in May 18 2007, killed 14 people, including five in police firing at Mecca Masjid and in the second attack, which were twin blasts in Lumbini Park and Gokul Chat on August 25 2007, 42 people had died.

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Flu shot did poor job against worst bug in seniors

ATLANTA (AP) — For those 65 and older, this season's flu shot is only 9 percent effective against the most common and dangerous flu bug, according to a startling new government report.

Flu vaccine tends to protect younger people better than older ones and never works as well as other kinds of vaccines. But experts say the preliminary results for seniors are disappointing and highlight the need for a better vaccine.

For all age groups, the vaccine's effectiveness is moderate at 56 percent, which is nearly as well as other flu seasons, the Centers for Disease Control and Prevention said Thursday.

For those 65 and older, it is 27 percent effective against the three strains in the vaccine, the lowest in about a decade but not far below from what's expected. But the vaccine did a particularly poor job of protecting older people against the harshest flu strain, which is causing most of the illnesses this year. CDC officials say it's not clear why.

Vaccinations are now recommended for anyone over 6 months, and health officials stress that some vaccine protection is better than none at all. While it's likely that older people who were vaccinated are still getting sick, many of them may be getting less severe symptoms.

"Year in and year out, the vaccine is the best protection we have," said CDC flu expert Dr. Joseph Bresee.

To be sure, the preliminary data for seniors is less than definitive. It is based on fewer than 300 people scattered among five states.

But it will no doubt surprise many people that the effectiveness is that low, said Michael Osterholm, a University of Minnesota infectious disease expert who has tried to draw attention to the need for a more effective flu vaccine.

Among infectious diseases, flu is considered one of the nation's leading killers. On average, about 24,000 Americans die each flu season, according to the CDC.

This flu season started in early December, a month earlier than usual, and peaked by the end of year. Older people are most vulnerable to flu and its complications, and the nation has seen some of the highest hospitalization rates for people 65 and older in a decade.

Flu viruses tend to mutate more quickly than others, and it's not unusual for multiple strains to be spreading at the same time. A new vaccine is formulated each year targeting the three strains expected to be the major threats. But that involves guesswork.

Because of these challenges, scientists tend to set a lower bar for flu vaccine. While childhood vaccines against diseases like measles are expected to be 90 or 95 percent effective, a flu vaccine that's 60 to 70 percent effective in the U.S. is considered pretty good.

By that standard, this year's vaccine is OK. The 56 percent effectiveness figure means people have a 56 percent lower chance of winding up at the doctor for treatment of flu symptoms.

For seniors, a flu vaccine is considered pretty good if it's in the 30 to 40 percent range, said Dr. Arnold Monto, a University of Michigan flu expert.

Older people have weaker immune systems that don't respond as well to flu shots. That's why a high-dose version was recently made available for those 65 and older. The new study was too small to show whether that made a difference this year.

The CDC estimates are based on about 2,700 people who got sick in December and January. The researchers traced back to see who had gotten flu shots and who hadn't. An earlier study put the vaccine's overall effectiveness slightly higher, at 62 percent.

The CDC's Bresee said there's a danger in providing preliminary results because it may result in people doubting — or skipping — flu shots. But the data was released to warn older people who got shots that they may still get sick and shouldn't ignore any serious flu-like symptoms, he said.

The new data highlights an evolution in how experts are evaluating flu vaccine effectiveness. For years, it was believed that if the viruses in the vaccine matched the ones spreading around the country, then the vaccine would be effective. This year's shot was a good match to the bugs going around this winter, including the harsher H3N2 that tends to make people sicker.

But the season proved to be a moderately severe one, with many illnesses occurring in people who'd been vaccinated.

____

Online:

CDC report: http://www.cdc.gov/mmwr

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Las Vegas Strip Shooting Leads to 3 Dead

A drive-by shooting on the Las Vegas strip early this morning by the occupants of a Range Rover SUV, who shot at the occupants of a Maserati, caused a multi-car accident and car explosion that left three dead.

Police said that they believe a group of men riding in a black Range Rover Sport SUV pulled up alongside a Maserati around 4:20 a.m. today and fired shots into the car, striking the driver and passenger, according to Officer Jose Hernandez of the Las Vegas Metropolitan police department.

The Maserati then swerved through an intersection, hitting at least four other cars. One car that was struck, a taxi with a driver and passenger in it, caught on fire and burst into flames, trapping both occupants, Hernandez said.

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The SUV then fled the scene, according to cops.

The driver of the Maserati died from his gunshot wounds at University Medical Center shortly after the shooting, according to Sgt. John Sheahan.

The driver and passenger of the taxi both died in the car fire.

At least three individuals, including the passenger of the Maserati, were injured during the shooting and car crashes and are being treated at UMC hospital.

Police are scouring surveillance video from the area, including from the strip's major casinos, to try and identify the Range Rover and its occupants, according to police.

They do not yet know why the Range Rovers' occupants fired shots at the Maserati or whether the cars had local plates or were from out of state.

No bystanders were hit by gunfire, Hernandez said.

"We're currently looking for a black Range Rover Sport, with large black rims and some sort of dealership advertising or advertisement plates," Hernandez said. "This is an armed and dangerous vehicle."

The Las Vegas Convention and Visitors Authority had no immediate comment about the safety of tourists in the wake of the shooting today.

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Bulgarian government resigns amid growing protests

SOFIA (Reuters) - Bulgaria's government resigned on Wednesday after mass protests against high power prices and falling living standards, joining a long list of European administrations felled by austerity during four years of debt crisis.

Prime Minister Boiko Borisov, an ex-bodyguard who took power in 2009 on pledges to root out graft and raise incomes in the European Union's poorest member, faces a tough task of propping up eroding support ahead of an expected early election.

Wage and pension freezes and tax hikes have bitten deep in a country where earnings are less than half the EU average and tens of thousands of Bulgarians have rallied in protests that have turned violent, chanting "Mafia" and "Resign".

Moves by Borisov on Tuesday to blame foreign utility companies for the rise in the cost of heating homes was to no avail and an eleventh day of marches saw 15 people hospitalized and 25 arrested in clashes with police.

"My decision to resign will not be changed under any circumstances. I do not build roads so that blood is shed on them," said Borisov, who began his career guarding the Black Sea state's communist dictator Todor Zhivkov.

A karate black belt, Borisov has cultivated a Putin-like "can-do" image since he entered politics as Sofia mayor in 2005 and would connect with voters by showing up on the capital's rutted streets to oversee the repair of pot-holes.

But critics say he has often skirted due process, sometimes to the benefit of those close to him, and his swift policy U-turns have wounded the public's trust.

The spark for the protests was high electricity bills, after the government raised prices by 13 percent last July. But it quickly spilled over into wider frustration with Borisov and political elites with perceived links to shadowy businesses.

"He made my day," said student Borislav Hadzhiev in central Sofia, commenting on Borisov's resignation. "The truth is that we're living in an extremely poor country."

POLLS, PRICES

The prime minister's final desperate moves on Tuesday included cutting power prices and risking a diplomatic row with the Czech Republic by punishing companies including CEZ, moves which conflicted with EU norms on protection of investors and due process.

CEZ officials were hopeful on Wednesday that it would be able to avoid losing its distribution license after all and officials from the Bulgarian regulator said the company would not be punished if it dealt with breaches of procedure.

But shares in what is central Europe's largest publicly-listed company fell another 1 percent on Wednesday.

If pushed through, the fines for CEZ and two other foreign-owned firms will not encourage other investors in Bulgaria, who already have to navigate complicated bureaucracy and widespread corruption and organized crime to take advantage of Bulgaria's 10-percent flat tax rate.

Financial markets reacted negatively to the turbulence on Wednesday. The cost of insuring Bulgaria's debt rose to a three-month high and debt yields rose some 15 basis points, though the country's low deficit of 0.5 percent of gross domestic product means there is little risk to the lev currency's peg against the euro.

Borisov's interior minister indicated that elections originally planned for July would probably be pulled forward by saying that his rightist GERB party would not take part in talks to form a new government.

MILLIONS GONE

GERB's woes have echoes in another ex-communist EU member, Slovenia, where demonstrators have taken to the streets and added pressure to a crumbling conservative government.

A small crowd gathered in support of Borisov outside Sofia's parliament, which is expected to approve his resignation on Thursday, while bigger demonstrations against the premier were expected in the evening.

Unemployment in the country of 7.3 million is far from the highs hit in the decade after the end of communism but remains at 11.9 percent. Average salaries are stuck at around 800 levs ($550) a month and millions have emigrated, leaving swathes of the country depopulated and little hope for those who remain.

GERB's popularity has held up well and it still led in the latest polls before protests grew in size last weekend, but analysts say the opposition Socialists should draw strength from the demonstrations.

The leftists, successors to Bulgaria's communist party, have proposed tax cuts and wage hikes and are likely to raise questions about public finances if elected.

(Additional reporting by Angel Krasimirov; editing by Patrick Graham)

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