Bertie Ahern will step down as Ireland's prime minister on May 6 to fight corruption allegations that have dogged his final term in office and risk tarnishing his legacy of helping deliver peace in Northern Ireland.

With little change expected in overall policy direction, the first task facing his likely successor, Finance Minister and fellow Fianna Fail party member Brian Cowen, will be to secure a "yes" vote in a referendum when Irish voters will determine the fate of the European Union's reform treaty.

The treaty replaces a constitution rejected by French and Dutch voters in 2005 and some EU diplomats had feared revelations at an inquiry looking into Ahern's finances would make it harder for him to persuade people to back it.

"He believes we have to refocus our energies on the important poll that now has to take place in early June for the Lisbon treaty," Justice Minister Brian Lenihan told RTE. "It is very important for Ireland that we get a yes vote."

An emotional Ahern said earlier he had done nothing wrong but would leave only a year after winning a historic third term so his government could focus on running the country.

"It is a matter of real concern to me that the important work of government and party is now being over shadowed by issues relating to me," Ahern, flanked by cabinet colleagues, told a hastily assembled televised news conference.

"I know in my heart of hearts I have done nothing wrong."

Among Ahern's final duties will be a trip to the United States to address a joint session of Congress on April 30.

One of Europe's longest serving premiers after almost 11 years, Ahern had previously said this would be his last term in office but he did not intend to go until it ended in 2012.

Widely praised for his work with former Prime Minister Tony Blair and U.S. President Bill Clinton in ending conflict in Northern Ireland, Ahern's star has been on the wane after revelations he received money from businessmen.

"RIGHT THING"

Blair described Ahern and his record as remarkable.

"He will always be remembered for his crucial role in bringing about peace in Northern Ireland," Blair said.

Both men have been tipped as potential future EU presidents - a role envisaged under the new treaty.

Gerry Adams, leader of Sinn Fein, the political ally of the now disarmed Irish Republican Army, said Ahern had done the right thing in deciding to go.

"The position was becoming increasingly untenable and the main focus of politics was around his finances."

Ahern said he brought forward his resignation so government would not be "distracted by incessant publicity" about the anti-corruption tribunal before which he been appearing.

Over the last six months Ahern has repeatedly been called back to answer questions over payments he received from friends and businessmen in the 1990s when he did not have a bank account despite being finance minister.

Ahern's popularity dipped as a once thriving "Celtic Tiger" economy began to slow last year.

Dermot O'Leary, chief economist with Goodbody stockbrokers, did not expect radical policy changes after Ahern's departure but said that if Cowen replaced him it would leave a vacancy in the finance ministry at a time of global economic turmoil.

"One important implication is the fact that we won't have continuity in the Department of Finance," O'Leary said.

Ahern last year tipped Cowen as his successor as leader of Fianna Fail. The party is the biggest in Ireland's Dail (lower house of parliament) meaning that winning its leadership would almost certainly make Cowen the next prime minister.