Thousands of people took to the streets throughout Peru yesterday after President Alberto Fujimori agreed to resign his post and call fresh elections.
Mr Fujimori made the sudden move in a televised address on Saturday following the release of a video showing a top aide bribing politicians to back the President's third term in office.
"After a profound reflection, and an objective evaluation of the circumstances, I have decided to dismantle the National Intelligence Service and call general elections in the quickest possible time," Mr Fujimori said. "In these general elections," he added, "the person who is speaking will obviously not participate."
However, Mr Fujimori did not say when he was stepping down or whether he would hand over power to Vice President Francisco Tudela or a transitional government.
The video showed Mr Valdimiro Montesinos, the President's right-hand man, offering cash to Mr Alberto Kouri, an opposition deputy. In return, Mr Kouri signed a contract agreeing to join Mr Fujimori's coalition, guaranteeing the government a parliamentary majority.
"God is Peruvian because he allowed this crisis to be resolved without a drop of blood," said Mr Fernando Olivera, an opposition deputy who made the video public.
Mr Montesinos (55) is an ex army captain expelled in 1977 after he was caught selling Soviet military secrets to the CIA. His whereabouts were unknown yesterday. He first proved his usefulness to Mr Fujimori in 1990 when he "disappeared" a legal file in which the an anti-corruption candidate was shown to have cheated on his property taxes.
Mr Fujimori ran for a third term last April, despite a constitutional prohibition, and emerged victorious when the main opposition candidate, Mr Alejandro Toledo, pulled out of the race amid allegations of vote-fixing.
Just hours before Mr Fujimori's announcement, the Organisation of American States (OAS) issued a strongly worded statement in which it demanded that Mr Montesinos and other named officials be suspended.