Myanmar's tough but pragmatic prime minister was sacked Tuesday by his hardline army colleagues, clouding prospects for the freedom of opposition leader Aung San Suu Kyi (search) and for democracy in the military-led Southeast Asian nation.

The ouster of Gen. Khin Nyunt (search), 65, who was also military intelligence chief, seemed to spell an end to a power struggle between so-called moderates in the junta and a faction uninterested in negotiating reconciliation with democracy activists or with nations critical of the regime.

Khin Nyunt was taken into custody late Monday and charged with corruption, according to officials in neighboring Thailand, who were the first to publicly break the news.

At the end of a day that saw rumors about Khin Nyunt's fate swirl through Myanmar's capital, Yangon, the country's state radio and television confirmed his removal Tuesday night.

A brief statement said Khin Nyunt was "permitted to retire for health reasons" — a phrase used in the past as a euphemism for the dismissal of Cabinet members. It was signed by the junta's supreme leader, Senior Gen. Than Shwe (search), and gave no other details.

A separate broadcast announced that the new prime minister is Lt. Gen. Soe Win (search), a former air defense chief who climbed into the regime's top ranks only last year.

With his reputation as relatively moderate, the taciturn Khin Nyunt was the go-to man for diplomats and others interested in political dialogue, even before he became prime minister during a Cabinet shakeup in August 2003.

Soe Win, thought to be about 56, is believed to espouse a hard line in dealing with the pro-democracy movement led by Suu Kyi, a Nobel Peace Prize winner, and with Western countries that have imposed years of sanctions to pressure the military to hand power to an elected government and to free Suu Kyi.

Suu Kyi's party, the National League for Democracy, won elections in 1990 but was not allowed to take power.

Khin Nyunt's political sophistication towered over that of his senior colleagues, whose experience has mostly been in overseeing jungle combat against rebellious ethnic groups in Myanmar, formerly known as Burma.

Soon after assuming the premiership, Khin Nyunt laid out a seven-step "road map to democracy."

But the plan was disdained by democracy activists, in large part because there was no provision for the release of Suu Kyi, who was put back under house arrest after a bloody attack on her and her followers by government supporters in May last year.

Some diplomats and opposition figures believe Khin Nyunt helped organize the attack, which the junta insisted was spontaneous.

Suu Kyi remains under house arrest in Yangon despite repeated entreaties from the world community, especially U.N. Secretary-General Kofi Annan.

U Lwin, a spokesman for Suu Kyi's party, said late Tuesday that Khin Nyunt might never have been able to implement his ideas for reconciliation because of his relative weakness within the ruling circle.

Asked about future relations with the junta, U Lwin said, "We will know only after we have the chance to deal with the new group."

In Bangkok, a Thai government critic of the junta said the change in leadership meant matters had "reached a point of no return toward any signs of national reconciliation.'

"This is a clear rejection of the world community's call for improvement of governance and cessation of human rights violations," said Kraisak Chunhavan, chairman of the Thai Senate's Foreign Affairs Committee.

The tensions within Myanmar's leadership — between veteran field commanders such as Than Shwe, 71, and his number two, Deputy Senior Gen. Maung Aye, on one side and Khin Nyunt's military intelligence faction on the other — had existed for years, said Aung Zaw, a Myanmar journalist.

Though never publicly acknowledged, "This was a dog-eat-dog business," said Aung Zaw, editor of The Irrawaddy, a magazine published by Myanmar exiles in Thailand.

Khin Nyunt climbed to power as a protege of the late dictator Ne Win, who appointed him military intelligence chief in 1984 after relatively little combat experience.

After pro-democracy demonstrations forced Ne Win to withdraw from public life in 1988, and the army bloodily suppressed the protests, the new junta included Khin Nyunt among its top leadership.

Several scholars and activists believe Khin Nyunt and his henchmen played an unsavory role in the 1988 events, using dirty tricks to provoke protesters into violence to serve as an excuse for a brutal crackdown.