Correa chose Acosta to head the assembly. But his longtime ally has shown his independence in the job and his resignation appeared to be the culmination of weeks of disagreements.

The tussle between the president and Acosta is important for foreign investors, particularly in the mining sector, where large projects run by Canadian companies are on hold until the government makes new rules.

Acosta would like to limit the work of companies such as Aurelian Resources, Corriente Resources and Iamgold Inc., while Correa says their investment is vital to a nascent industry that could spur economic growth.

(Writing by Saul Hudson; Editing by Doina Chiacu)