House of Representatives speaker Agung Laksono said he had received a letter from the outgoing president saying that Sutarto had resigned but the legislature had yet to approve the offer.

"Mr. Endriartono is still armed forces commander. His resignation has not been approved," Laksono said.

The speaker said Megawati had proposed outspoken army chief General Ryamizard Ryacudu as acting armed forces chief.

Recent reports said Sutarto had opposed Megawati's decision to award honorary four-star general status to Home Affairs Minister Hari Sabarno and intelligence chief Abdullah Hendropriyono, both retired army officers.

Megawati will end her term in office on October 20 and will be replaced by former general Susilo Bambang Yudhoyono, who won Indonesia's first direct presidential election by a landslide on September 20.

Even if Ryacudu is appointed to replace Sutarto, who reached the retirement age of 55 two years ago, the incoming president can appoint new military commander when he assumes office.

Ryacudu has made several controversial comments in the past.

Last month he alleged intelligence agents have infiltrated Indonesia to destabilize the country and that their number was "alarming".

He has also described seven soldiers who were jailed for killing a separatist leader who sought peaceful independence for Papua province as "heroes".