June 6 (Bloomberg) -- Bolivian President Carlos Mesa presented his resignation for the second time in three months in a bid to end pro-nationalization protests that have brought the capital to a standstill.

``We have reached a point where no one wants to listen to each other,'' Mesa, 51, said in a speech broadcast on Bolivian cable television Bolivision. ``This is why I offer my resignation so as not to be an obstacle.''

Mesa, who first offered to resign in the face of protests against the government's energy policies in March, was counting on foreign investment to tap Bolivia's 28.7 trillion cubic feet of natural gas, Latin America's second-largest reserves after Venezuela, to drive economic growth and create jobs.

Mesa, 51, earlier today left the presidential palace after protests near the palace raised concerns for his safety. He said that he will remain as president until Congress accepts his resignation and that he will not seek asylum abroad.

``This is no longer a tactical resignation. It's a fait accompli, although late in the making,'' political analyst Carlos Toranzos told CNN en Espanol.

Police Blockades

Thousands of protesters demanding regional autonomy and nationalization of the oil and gas industry tried to break through a police blockade around the main square, site of the presidential palace and Congress, state news agency ABI said. Police responded with tear gas and arrested 26 protesters, according to the agency.

Protesters broke open the main drinking water pipe to La Paz, cutting off the water supply to the capital, La Paz radio station Radio Panamericana reported. Gasoline stations and stores closed due to shortages of fuel and basic foodstuffs after two weeks of roadblocks by protesters, according to La Paz daily La Razon.

Mesa has faced daily protests since Congress May 17 passed a smaller increase in oil and gas taxes than demanded by Evo Morales of the country's second-largest party, Movement Toward Socialism. The movement represents Bolivia's highland Indian majority who are demanding a larger share of the country's resources.

The law also forces 12 foreign oil companies including Spain's Repsol YPF SA, Irving, Texas-based Exxon Mobil Corp. and Brazil's Petroleo Brasileiro SA, Petrobras, to renegotiate 72 oil and gas contracts signed from 1993 to 2003.

Lost Investment

After the new law's passage, the president of the Bolivian Hydrocarbon Chamber, Raul Kieffer, said the country stood to lose $10 billion in planned investment as companies such as BG Group in London said they would review their involvement in the Bolivia. Rio de Janeiro-based Petrobras, the biggest foreign oil and gas company in Bolivia, said it will cut back on investment.

Morales, a congressman who leads the second-largest opposition party, had called for on Mesa to resign and for his replacement to order a state takeover of all oil and gas fields.

``This is the consequence of Carlos Mesa's bad government,'' Morales told CNN en Espanol. ``Until the social problems of racial discrimination and poverty are solved, we can never solve the country's political problems.''

Mesa stepped up from the vice-presidency 18 months ago after violent street protests over plans to export natural gas killed at least 80 people and triggered the resignation of President Gonzalo Sanchez de Losada. Mesa's mandate was scheduled to expire in January 2007.

To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net

Last Updated: June 6, 2005 22:55 EDT