SINGAPORE - Lee Kuan Yew, the founding father of modern Singapore, stepped down from active government this weekend after an election campaign that focused on his party's shortcomings, but his policies, which have molded the city state into a world-class financial hub, will remain largely untouched.

The 87-year-old was returned unopposed to parliament in the May 7 general election but his ruling People's Action Party (PAP) was returned to power with only about 60 percent of the popular vote, the lowest since independence in 1965.

Lee said on Saturday that he and Goh Chok Tong, another former prime minister, were stepping down from the cabinet to allow "a younger generation to carry Singapore forward in a more difficult and complex situation".