"Having lost confidence in the defence minister, General Jose Manuel da Silva Viegas realized that he was no longer in a position to exercise his functions as commander of the army," said a statement sent in his name to the Lusa news agency.

Viegas, whose army experience spans a period of more than 40 years, had occupied the position of chief of general command of the army since March 2001.

He turned in his resignation to Portuguese President Jorge Sampaio, who is the head of the nation's armed forces, on Friday.

The statement did not say why Viegas mistrusted Defence Minister Paulo Portas, who is also head of the Popular Party, a right-wing partner in the government coalition.

"The respect which he has for the military institution and the men and women who serve the country in the Portuguese army do not permit him to speak publicly about the reasons why he lost confidence in the minister," it said.

Portas testified as a witness in June for over six hours in an embezzlement trial involving financial links between a private university and a company he once ran.

The minsiter was called to answer questions about the relationship between Moderna University and a polling institution it finances, which Portas managed in 1997-98.

At stake was Portas' alleged use of university funds for political and private gains.

Thirteen former members of the management of Moderna University, including the former rector, face charges of criminal association, fraudulent management, fraud, forging documents and bribery.

Portugal has also been criticized for not doing enough to improve conditions of the nation's military.

The cash-strapped EU member country has slashed funding for the defence ministry in recent years at a time when the military is struggling to upgrade ageing equipment.

WAR.WIRE