The prime minister's office said late yesterday that Sanjaasuregiin Zorig, Minister for Infrastructure in the ruling Democratic Coalition, was axed and stabbed to death at his home by two masked assailants at about 2000 hrs IST yesterday.

The killing, believed to be politically motivated, could further complicate efforts to break a deadlock in Mongolian politics that has persisted since Prime Minister Tsakhiagiin Elbegdorj resigned with his entire cabinet on July 24.

A 36-year-old Moscow-educated former social sciences professor and a Member of Parliament since 1990, Zorig had remained as acting minister along with other cabinet members pending the formation of a new government. A popular figure who played a leading role in the 1990 democratic revolution that ended seven decades of Stalinist rule, he was widely expected to be named next week as apossible successor to Elbegdorj.

The coalition has considered and failed to agree on four earlier candidates for the job. Zorig would have become the fifth nominee to be proposed.The crisis was precipitated when the three-month-old coalition government lost a vote of no confidence following a feud over whether to merge a state bank with a private bank.

The opposition Mongolian People's Revolutionary Party, the former Communists, accused the government of organising the merger in a way that financially benefitted its members and protested by boycotting the Great Hural, Mongolia's parliament, throwing proceedings into turmoil for almost two months.

The political impasse has prevented work on crucial economic legislation.Mongolia, once dependent on subsidies from Moscow, has seen its economy weaken precipitously since the breakup of the Soviet Union. According to World Bank estimates, 36 per cent of its two million people live in poverty. Inflation topped 30 per cent last year and unemployment is high inwhat is still a largely pastoral economy.

In 1990, peaceful protests forced the pro-Soviet People's Revolutionary Party to drop Communism and allow free and fair multi-party elections. Its 75-year rule ended with a 1996 parliamentary election that swept the reformist Democratic Union into office and won accolades for the nation's progress toward democracy.