Challenged by three straight days of student protests, Albania's Communist leadership has promised to allow competing political parties and fired five members of the ruling Politburo.

The actions Tuesday appeared to signal a major defeat for Communist hard-liners in Europe's last bastion of Stalinist rule, which President Ramiz Alia has described as being on the verge of economic disaster.The Balkan nation of 3.1 million, which opened its borders slightly this year after decades of isolationism under the late Enver Hoxha, would be the last country in Europe to introduce a multiparty system.

Alia met with student representatives in Tirana late Tuesday and said the government is willing open up a dialogue. He also urged them to return to classes or "incidents which nobody desires could occur."

Diplomats in the Albanian capital said students were staying away from classes at Tirana University.

Demonstrations by thousands of students that began on Sunday and have led to clashes with police have been the most serious since July, when thousands of people took refuge in foreign embassies until were allowed to emigrate.

The official news agency ATA announced the legalization of other parties in a communique released after a meeting of the Communist Party's policy-setting Central Committee in Tirana.

"The plenum was of the opinion that the creation of independent political organizations according to the law in force is to the good of the further democratization of the life of the country and pluralism," the agency said.

Elections scheduled for Feb. 10 are seen as a test of the government's willingness to live up to pledges of gradual reform and of the people's ability to exercise a measure of political freedom after decades of authoritarian rule.