The official BTA news agency said Wednesday that Andrei Lukanov will resign as premier. Lukanov told journalists the report was premature but did not directly deny it.

BTA said it learned from a source close to President Zhelyu Zhelev that Lukanov - a Socialist who took office in February - would be replaced by a politician who is a member of neither the Socialist Party nor the main opposition Union of Democratic Forces.Such an agreement could put an end to repeated protests in Bulgaria against Lukanov's government of former Communists, and end a political stalemate that has blocked action to remedy the country's severe economic problems.

Lukanov, a former Communist turned reformer, became increasingly unpopular as Bulgaria faced its worst economic crisis since World War II.

Electricity, many foodstuffs and consumer goods are rationed or simply unavailable in Sofia and throughout this Balkan country of 9 million people. The country cannot make the payments on its $11 billion foreign debt.

Early Wednesday, police beat students who barred a main intersection in the capital and a general strike called by the Podkrepa trade union entered its third day. The strike, called to bring down the Lukanov government, appeared to be gaining momentum.

BTA reported it had learned a deal would be announced later Wednesday giving Bulgaria a new caretaker Cabinet and a new premier. There was no independent confirmation of the report.

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(Additional information)

Would Lenin be Red?

Todor Zhivkov, Bulgaria's deposed communist dictator, says even Lenin would agree that communism was a big mistake.

"I believe that at its very conception, the idea of socialism was stillborn," the one-time hard-liner said in an interview with The New York Times published Wednesday.

"If I had to do it over again, I would not even be a Communist, and if (Soviet state founder Vladimir) Lenin were alive today he would say the same thing," Zhivkov said.

Long seen as the East Bloc leader most subservient to Moscow, Zhivkov, 79, was forced to resign about a year ago after ruling Bulgaria for 35 years.

Interviewed at his granddaughter's luxurious villa near Sofia where he is under house arrest, Zhivkov said he began to have his doubts about the communist system in the mid-1950s.

"I have been a soldier, I have been a communist, it is my deep belief and conviction that I served my people and my country," Zhivkov told the newspaper. "But I must now admit that we started from the wrong basis, from the wrong premise. The foundation of socialism was wrong."