Budapest - Hungarian Prime Minister Ferenc Gyurcsany said on Saturday he will step down from office, calling for a new government with a new leader to tackle Hungary's economic crisis.

At a congress of his Hungarian Socialist Party in Budapest, the deeply unpopular premier spoke of the need for a wider social consensus to tackle the crisis.

"I hope I am the only obstacle to this - and if I am, then I will now remove that obstacle," Gyurcsany said.

Budapest  - Hungary's economy is set to shrink by 4 to 5 per cent this year, the head of economic think tank Kopint-Tarki said on Friday.

The economic research institute has issued increasingly grim forecasts over recent months as Hungary's economic gloom has deepened.

In December, the estimate was a contraction of 1.3 per cent, said Kopint-Tarki head Eva Palocz.

Budapest - Clothing giant Levi-Strauss confirmed on Friday that it will close its Hungarian plant by the end of June with the loss of 549 jobs.

The factory in the small southern town of Kiskunhalas has been turning out the company's iconic denim jeans since 1988, when Hungary was still a communist state.

The US clothing company told the local news agency MTI that it had agreed a severance package with its Hungarian workers.

Over 30,000 jobs have been lost in Hungary since the effects of the global financial crisis hit the country hard last October.

Budapest  - The Hungarian foreign ministry issued a "Warning to those who want to work in Great Britain" Thursday, urging them to think twice about going there to escape the deepening recession at home. The British embassy in the capital, Budapest, was not amused.

A Foreign Ministry spokesman, Lajos Szelestey, sent a statement to the Hungarian state news agency MTI urging Hungarians to think long and hard before travelling to Britain despite the "serious economic situation."

Budapest  - The veteran Hungarian director Peter Bacso - best known for The Witness, his biting satire on the absurdity of the communist system - has died at the age of 81.

Wednesday's death of a legend of Hungarian cinema was announced by the Association of Hungarian Film Artists. No further details were given, but Bacso was known to have been suffering from a lengthy illness.

Bacso was born in 1928 in Kosice, now in Slovakia. He enrolled in the Budapest Academy of Theatre and Film in 1946 and worked as a scriptwriter after graduating in
1950.

Bacso was living in the Hungarian capital as the Hungarian communist party consolidated its power through intimidation and terror. He directed his first film in 1963.

Moscow - Russia and Hungary agreed to set up a joint venture to build the Hungarian stretch of the South Stream pipeline, Russian Premier Vladimir Putin said Tuesday after talks with his Hungarian counterpart Ferenc Gyurcsany in Moscow.

Russian gas export monopolist Gazprom and Hungary's energy firm MOL also plan to build new underground storage facilities in the agreement inked Tuesday, Putin was cited by news agency Interfax as saying.