Turkmenistan's president said Saturday he was stepping down as leader of the ruling party to promote a multi-party system in the isolated former Soviet state, a government source told AFP.

President Gurbanguly Berdymukhamedov told a party conference he was resigning as leader of the ruling Democratic Party he has led since 2006, the source said on condition of anonymity.

"The president of a country should not be a member of any party, so as not to create advantages for his party in multi-party conditions," the source quoted the president as saying at the conference.

Berdymukhamedov, a dentist by profession, took power in 2006 after the death of his father, eccentric dictator Saparmurat Niyazov, who erected a golden rotating statue of himself as part of a bizarre personality cult.

Berdymukhamedov also took over as Democratic Party leader from Niyazov. Formerly the Turkmen branch of the Soviet Communist Party, it was the country's only party for two decades.

Last year, a new law authorised the creation of a new political party called the Party of Industrialists and Entrepreneurs of Turkmenistan.

Both parties are set to contest parliamentary elections in December this year.

Berdymukhamedov has embarked on tentative reforms, although his critics say the stabs at change have been little more than window dressing and he has done little to truly dismantle Niyazov's legacy.

The president also said that as leader of the armed forces, the law bars him from being a member of any party, according to the source.

It was unclear whether the party members would immediately vote for a new leader. State television was due to air a report on the conference later Saturday.