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Pope Benedict XVI announced on Monday he will resign this month because of his advancing age in a fast-changing world, becoming the first pontiff in 700 years to step down of his own free will.
The 85-year-old said he will step down on February 28 after just eight years in office, making his one of the shortest pontificates in modern history and stunning the world's 1.1 billion Catholics.
The German-born leader made the announcement in a speech in Latin at a meeting with cardinals in his residence in the Apostolic Palace, with his frail voice barely audible as he read a pre-written text.
"I have come to the certainty that my strengths, due to an advanced age, are no longer suited to an adequate exercise of the Petrine ministry," he said.
As tributes poured in from across the world, the Vatican emphasised the former Joseph Ratzinger was not leaving due to any illness, despite speculation over his frail appearance in recent months.
Vatican spokesman Federico Lombardi said he expected a conclave of cardinals to be held in March within 15 or 20 days of the resignation and a new pope elected before Easter Sunday on March 31.
"The pope caught us a bit by surprise," Lombardi said at a hastily-arranged press conference.
Cardinal Angelo Sodano, who was at the historic meeting with the pope, described the announcement as "a bolt of lightning in a clear blue sky".
Benedict's brother Georg Ratzinger told AFP he had known "for a few months" that he was planning to resign and was "feeling the burden of his age."
Some faithful said they hoped the move would signal a major change for the Church after a conservative pontificate that has been marred by scandals including most notably clerical child abuse.
Vatican observers have already begun speculating over who could succeed Benedict, with online betters tipping an African pope as the most likely.
But some say the number of voting-age cardinals from Europe and North America -- 76 out of 118 -- could sway the choice to a Western state.
In the period between the resignation and the election of a new pope, the Catholic Church will be governed by Secretary of State Tarcisio Bertone.
The closed-door conclave of cardinals is held in the Sistine Chapel and its decision is famously announced with a puff of black or white smoke to indicate whether a nominee has been selected or not.
The new pope is then announced immediately afterwards with the cry "Habemus Papam" and appears before the crowds of faithful in St Peter's Square.
German Chancellor Angela Merkel led tributes from political and religious leaders across the globe, hailing Benedict as "one of the most significant religious thinkers of our time".
US President Barack Obama offered "our appreciation and prayers" on behalf of all Americans.
Justin Welby, spiritual leader of the world's Anglicans, said he had held his office with "great dignity, insight and courage".
The Ashkenazi Chief Rabbi of Israel said Benedict XVI had improved ties between the two religions and which helped reduce anti-Semitism around the world.
Shocked believers flocked to St Peter's Square to express their dismay at what will be only the second formal resignation in the Catholic Church's 2,000-year history after Celestine V in 1294.
"I love Benedict. We're really shocked he's resigning because he wasn't pope for long enough. He hasn't finished his plan," said Sebastian Mazur, a 21-year-old trainee priest from Poland.
In the pope's birthplace of Marktl am Inn in southern Germany, 60-year-old local resident Karin Frauendorfer broke down in tears and said the resignation was "a bad thing in itself, but justified given his poor state of health".
Gian Maria Vian, editor of the Vatican's official daily, L'Osservatore Romano, said the pope took his decision after a particularly wearying trip to Mexico and Cuba last year and only after "a repeated examination of his conscience".
Benedict, who succeeded the late pope John Paul II in 2005 and is known as a diehard traditionalist and a lightning rod for controversy, will retire to a monastery within the Vatican walls.
He said his "strength of mind and body... has deteriorated in me to the extent that I have had to recognise my incapacity to adequately fulfil the ministry entrusted to me."
He said he would be stepping down at 8:00 pm (1900 GMT) on February 28, adding that he was "well aware of the seriousness of this act".
Benedict, who has often had to use a mobile platform to move around St Peter's basilica during Church services, had hinted in a book of interviews in 2010 that he might resign if he felt he was no longer able to carry out his duties.
The pope suffers from arthritis, had a stroke while he was still cardinal and broke a wrist when he slipped in the bath in 2009.
He was the Catholic Church's doctrinal enforcer for many years and earned the nickname "God's Rottweiler". He is an academic theologian who has written numerous books including a trilogy on the life of Jesus Christ that he has just completed.
The guiding principle of Benedict's papacy has been to reinvigorate the Catholic faith, particularly among young people and in parts of the world with rising levels of secularism like Europe and North America.
He has shown a degree of openness on some moral issues -- becoming the first pope ever to speak about the possibility of using contraception to avoid the spread of the AIDS virus -- but is better known for his opposition to abortion, euthanasia and gay marriage as well as the abuse scandals that tainted the Church in the eyes of many.
The US Survivors Network of those Abused by Priests, which has been highly critical of Benedict's handling of the paedophilia scandal, called on the Church to "select a pontiff who puts child safety and victim healing first."
The scandal over confidential memos leaked from the Vatican by Benedict's once loyal butler last year was another particularly hard blow for the pope.
Sandro Magister, a Vatican expert at L'Espresso weekly, said the resignation could set a precedent.
"He must have evaluated the effects of the resignation on future pontificates, which will definitely not be for life but will become fixed-term," Magister said.
Vatican expert Marco Politi, author of a best-selling biography of Benedict, said: "This gesture was very courageous and revolutionary.
"This is the first time that in a period of peace for the Church, a pope decides to step down of his own free will," he said.