will stay in Cabinet.

In a surprise turn-about over controversial remarks he made about a Planning appeal, Mr. Smith offered his resignation to Dr. Saul yesterday.

"I don't think he's had a change of heart, I think he's continued to reflect on things,'' Dr. Saul told The Royal Gazette .

Now, "I'm going to reflect on this,'' he said. Having just returned from Hong Kong on Thursday, "I need to just think about it myself.'' He denied that he asked for Mr. Smith's resignation, and declined to comment when asked if he thought the Environment Minister had done the proper thing by offering it.

"I will just keep my own counsel at the present moment,'' he said. Mr. Smith, who did not return telephone calls yesterday, got in trouble over off-the-cuff remarks he made in the House on November 10 which were picked up by a microphone and broadcast over the air.

The Paget West United Bermuda Party MP voiced his frustrations at a group of Government backbenchers dubbed "the people's five,'' who minutes earlier had stayed away from a vote and allowed Opposition MP Mr. Stanley Lowe to defeat Government nominee Mrs. Grace Bell for the Deputy Speaker's post.

Speaking to former Cabinet Minister Mr. Irving Pearman, Mr. Smith described the group as "nasty'' and "wicked,'' before turning to a Planning appeal that was before him from Smith's South MP Mr. Trevor Moniz -- one of the five.

"He's got an appeal in to me for an illegal house,'' Mr. Smith told Mr.

Pearman. "I haven't even looked at it. I said I ain't looking at it for now.

The naughty b*****.

"He built it anyway. Couldn't care less. They're a law unto themselves.'' Although Mr. Smith apologised in the House of Assembly on Friday and weathered an attack from Opposition Leader Mr. Frederick Wade, pressure has continued to mount for his resignation.

Numerous callers to Mrs. Shirley Dill's Sunday phone-in programme on VSB Radio said Mr. Smith should step down.

And for the second time in less than a week, an editorial in yesterday's The Royal Gazette called for the young Minister's resignation, saying his apology missed the point.

"The UBP now has two distinct problems, the gang of five and Mr. Tim Smith,'' the editorial said.

In the House, Mr. Smith apologised to Mr. Moniz and the people of Bermuda, adding that his remarks had not breached a confidence but that he would disqualify himself from hearing the appeal.

At the time, Dr. Saul said the apology was "the end of the matter''. But Mr.

Wade said that Mr. Smith "demonstrated a lack of understanding and a lack of appreciation for the exercise of his power that's so awesome''.

Yesterday, Dr. Saul said Mr. Smith's letter of resignation was "effective immediately'', but he wanted to think about it overnight. As usual on Tuesday, Dr. Saul meets with his Cabinet this morning.

Mr. Wade said he was "pleased that Mr. Smith has finally done the right thing''.

"It's too bad he took so long to come to this conclusion.'' He hoped Dr. Saul would accept the resignation and "put this matter to rest''. Otherwise, he said the controversy would continue.

Mr. Moniz declined to comment on the resignation offer.

But a Cabinet vacancy left by Mr. Smith's resignation would open the possibility of a peace overture to the group of five dissident MPs, comprised of former Tourism Minister C.V. (Jim) Woolridge and four MPs who supported him in the August leadership contest against Dr. Saul.

Alternatively, it would also open the possibility of bringing Mrs. Bell into Cabinet. The St. George's South MP now holds no parliamentary post.