Opposition parties agreed on Friday to nominate the head of an alliance that led months of protests against President Ali Abdullah Saleh to form a new government, an opposition leader said.

Saleh transferred all his powers to Vice President Abd-Rabbu Mansour Hadi after signing an agreement in Saudi Arabia on Wednesday that was proposed by Gulf states to resolve the crisis resulting from months of demonstrations against Saleh's rule.

Yahia Abu Usba, deputy head of the Yemeni Socialist Party, said that Mohammed Basindwa, a former foreign minister who now heads the opposition National Council formed after the protests broke out in February, had been nominated to be the next prime minister.

I expect the vice president (Hadi) to issue a decision asking him (Basindwa) to form the national unity government tomorrow (Saturday), Abu Usba told Reuters. Basindwa was foreign minister from 1993 to 1994.

The Gulf-backed accord, under which Saleh retains the title of president, provides for the formation of a new government led by the opposition to prepare for early presidential elections within 90 days.

(Reporting by Mohammed Ghobari, writing by Sami Aboudi, editing by Tim Pearce)

(Reporting by Sami Aboudi)