East Timor's parliament on Wednesday said it would scrap lifetime pensions for MPs, bowing to public pressure after dropping a plan to buy SUVs for lawmakers in one of southeast Asia's poorest nations.

Student-led demonstrations against the multi-million dollar purchase drew thousands this week in the capital Dili, with demonstrators and police clashing two days in a row.

Protesters' demands initially focused on cancelling the $4.2 million plan to purchase SUVs for National Parliament members but later widened to include other issues including lifetime pensions for former MPs.

Under a law passed in 2006, former MPs are entitled to pension equivalent to their salary.

Parliament said in a statement Wednesday it would take steps to annul the law following a meeting with representatives of

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