UPDATE 4-Millennium bcp chairman steps down

(Updates with news conference)

By Sergio Goncalves

LISBON, Dec 4 (Reuters) - Millennium bcp (BCP.LS) Chairman Jardim Goncalves, under fire from shareholders over reports his bank granted loans to his son, handed in his resignation on Tuesday.

The departure of Goncalves, who founded Millennium in 1985 and helped turn it into Portugal's largest listed bank, should help ease months of management instability that began in May after Millennium's bid for rival Banco BPI (BBPI.LS) failed.

"Today is a very important day for the life of the bank in an attempt to turn the page on the last year," said Chief Executive Filipe Pinhal, adding that he had won support from leading shareholders to lead the bank after this year.

Millennium's senior board met on Tuesday and received Goncalves' resignation. He will step down on Dec. 31 as chairman of the bank's supervisory board and its senior board.

"This is a new phase and I do not intend to be present for this new phase," Goncalves told journalists.

Pinhal said his new management team would include Rui Horta e Costa, the former CEO of Energias de Portugal (EDP.LS), as chief financial officer.

Goncalves' departure comes after the Bank of Portugal said it was investigating Millennium following reports that it granted loans to his son and to a shareholder, which could be illegal in Portugal. Millennium denies any wrongdoing.

His exit will be the final chapter in a power struggle between him and the former chief executive, Paulo Teixeira Pinto, who left at the end of August. Much of the power struggle played out in local media, which published reams of articles in the past few months on the publicly damaging row.

Goncalves' mandate expires at the end of 2008. He will be replaced by Gijsbert Swalef of Eureko, Millennium's second-largest shareholder with 7.7 percent, the bank said.

"This is a step forward for the bank which was stagnating. (His departure) will help the bank," said Dimitrios Contominas, who owns more than 2 percent of Millennium.

Contominas also said he would vote at a future extraordinary general shareholder meeting (EGM) to keep Pinhal in his post. Pinhal's mandate runs out at the end of the year.

The EGM was called for late on Monday by a shareholder group spearheaded by investor Joe Berardo, who opposes Pinhal, and separately by the bank's executive board, which backs him.

The meeting is expected to take place in January to elect a new management team for the 2008-2010 period.

Last month, Millennium and smaller rival BPI announced they had failed to agree on a merger which would have formed Iberia's third-largest listed bank. That attempt came after the failed hostile takeover bid for BPI earlier in the year, which was pushed by Millennium's former chief executive. (Additional reporting by Axel Bugge; Translated by Henrique Almeida; Editing by David Cowell and Braden Reddall)