Iceland PM to step down, calls for May election

REYKJAVIK Jan 23 (Reuters) - Iceland's Prime Minister Geir Haarde on Friday, under growing pressure from his country's financial collapse, said he would step down and announced his intention to call an early election for May 9.

Haarde told a news conference a medical examination had last week revealed he had a malignant tumour of the oesophagus and he would seek surgery abroad at the end of January or early February.

"I have decided not to seek re-election as leader of the Independence Party at its upcoming national congress," Haarde told a news conference, saying a new chairman would lead the party in the elections.

Elections would not normally be held until 2011.

(Reporting by Kim McLaughlin; Editing by Jon Boyle)