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Two principal officials from Hong Kong's Chief Executive Tung Chee-hwa's cabinet resigned yesterday, sending shock waves through the local political arena.

Antony Leung (L) and Regina Ip

The government of the special administration region announced the resignations late yesterday evening of the Secretary for Security, Regina Ip, and Financial Secretary Antony Leung.

The government did not say who is going to take the vacancy left by Ip but confirmed Stephen Ip Shu-kwan, secretary for economic development and labour, will replace Leung as acting financial secretary.

Ip tendered her resignation on June 25, citing personal reasons. She will leave her post from next Friday.

The chief executive said he tried to persuade Ip to stay and suggested she consider taking a long leave to get some rest and sort out her personal matters before making up her mind. However, she could not be swayed.

"After careful consideration, I have decided to respect her wish and accept her resignation,'' Tung said.

Praising Ip's performance during her service, Tung said she has exceptional abilities and great wisdom.

Leung's decision to quit the civil service will be implemented with immediate effect, according to a government statement.

Leung said it was a good time to leave the post as the Appropriation Bill and the major revenue proposals in the budget had been passed by the Legislative Council, severe acute respiratory syndrome had been contained and economic relaunch measures were being implemented with recovery in the most affected industries stronger than anticipated.

A third factor was the successful achievement of the Closer Economic Partnership Arrangement with the mainland, which was signed on June 29, the first day of Premier Wen Jiabao's three-day trip to Hong Kong.

"I am glad that I have had the opportunity to serve the people of Hong Kong, which I have carried out in all respects with a clear conscience at all times,'' Leung said.

The chief executive commended Leung for helping revitalize Hong Kong's economy.

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