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((This October 4 story has been corrected to remove reference to opposition holding two-thirds majority in paragraph 7))
VICTORIA (Reuters) - The leader of the parliamentary majority in the Seychelles said on Tuesday President James Michel should not go ahead with handing power to his deputy when he steps down this month, calling instead for a presidential election to be held.
Michel, whose party has been in power since 1977, announced last week he would step down after less than a year in office and that Vice President Danny Faure would take over for the rest of the five-year term.
Michel did not give a reason for his decision, but it followed a victory in September for the Linyon Demokratik Seselwa (LDS) coalition in parliamentary elections, the first opposition win in decades amid public frustration about economic inequality.
It marked a dramatic political change for the tiny archipelago, which relies on tourism and is seeking to build up its financial services industry.
"A new presidential election needs to be held as soon as possible," Wavel Ramkalawan, leader of the opposition coalition which forms the majority in parliament, told deputies.
"We want a caretaker president who will hold office until elections are held. We do not want this situation where a president can just pass on the baton," Ramkalawan said.
The opposition has said it wants to change the constitution to revise articles that allow presidential powers to be handed over for the rest of a term without a fresh election.
The president heads the government. New ministerial appointments to the cabinet must be vetted by parliament.
Reporting by George Thande; Writing by Edmund Blair; Editing by Raissa Kasolowsky