This file photo taken on September 10, 2008 shows Singapore Minister Mentor Lee Kuan Yew talking at the Forbes Global CEO conference in Singapore. -AFP Photo

SINGAPORE: Singapore's founding prime minister Lee Kuan Yew said Saturday he will retire from cabinet as the government reaches out to citizens after losing seats in recent elections.

The surprise statement came a week after the opposition scored a major breakthrough in the polls that revealed deep resentment against the People's Action Party (PAP) which has ruled the country for more than 50 years.

Goh Chok Tong, the city-state's second premier, is also to retire, according to a statement released jointly with 87-year-old Lee.

“We have studied the new political situation and thought how it can affect the future... The time has come for a younger generation to carry Singapore forward in a more difficult and complex situation,” the statement said.

“After a watershed general election, we have decided to leave the cabinet and have a completely younger team of ministers to connect to and engage with this young generation in shaping the future of our Singapore.”

Lee's son, Prime Minister Lee Hsien Loong, 59, is due to form a new government, as early as next week, after the PAP was returned to power in the May 7 polls.

Lee, who once said he preferred to be feared than loved as a leader, stepped down in 1990 after 31 years as prime minister but remained an influential adviser in the cabinet, holding the title of minister mentor.

He will continue as an MP.

Goh, who turns 70 this month and who had succeeded Lee, held the title of senior minister.

The elder Lee won unopposed in the last elections and Goh beat a strong opposition challenge to retain his parliamentary seat.

Although the ruling party won 81 out of the 87 elected seats at stake, the opposition managed to break the PAP's stranglehold on power by scoring its best performance since independence in 1965.

Foreign Minister George Yeo was the biggest casualty of opposition gains when his five-member PAP ticket was toppled by the Workers' Party.

In addition the PAP's share of all votes cast, the equivalent of an approval rating in a country that does not publish surveys about government performance, fell to an all-time low of 60 per cent from 67 per cent in 2006 and 75 per cent in 2001.

The election result has prompted soul-searching within the PAP and the two former premiers said the new cabinet should have “a fresh clean slate.”

Lee is widely credited for Singapore's rapid rise from a third world trading port to one of Asia's wealthiest, most stable and safest cities with a per capita income of $48,000 in 2010.

But he is also criticised for sidelining political rivals as he consolidated power. People who dared to oppose Lee often found themselves in court, charged with defamation and other offences.

Ahead of the May election, however, thousands of Singaporeans joined opposition rallies and vented their anger online on issues like high living costs, the influx of foreign workers and the PAP's alleged “arrogance”.

“I think the feedback was that the people are really very angry with the PAP,” said political analyst Seah Chiang Nee, who operates a popular political website www.littlespeck.com.

“There will be change. For one, people won't have to fear about having someone always looking over their shoulders or about being sued. They can now breath easier when they participate in politics.”

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