By Jack Kim and Ju-min Park
SEOUL (Reuters) - South Korean software mogul Ahn Cheol-soo gave up on Friday his bid to become president and endorsed another opposition candidate, setting the stage for a close race with conservative favorite Park Geun-hye to lead Asia's fourth largest economy.
Opinion polls had shown that Park, daughter of the country's assassinated leader Park Chung-hee, would have easily the December 19 presidential election if the opposition had fielded two candidates and split the opposition vote.
But Ahn's decision to step aside leaves Moon Jae-in, a former human rights lawyer and the candidate of the left-of-center main opposition Democratic United Party, as Park's main challenger.
"Moon Jae-in is the single candidate ... send Moon Jae-in your support," Ahn, who was running as an independent with a strong backing of urban and young professional voters, told a news conference.
South Korea's economy and relations with North Korea are two of the main issues in the election to replace President Lee Myung-bak, who is serving a five-year term ending in February and can not run again.
Jae-in has pledged to resume unconditional aid to North Korea and to tighten regulation on big business.
Ahn and Moon had been trying to agree on a single candidate and avoid splitting the anti-Park vote but had failed during more than two weeks of bitter discussions to merge their campaigns.
Experts said Ahn's decision to step aside would turn what had looked like an easy win for Park, who is trying to become the country's first woman leader, into a very close race.
"This will have a powerful impact ahead and bring more votes to Moon in the two-way race," said Ka Sang-joon, a political science professor at Dankook University in Seoul.
Moon, 59, has been under intense pressure from his party, which has 127 of the 300 seats in parliament and support from across the country, not to yield to Ahn.
Policy proposals from the two main candidates have been remarkably similar considering the differences in their political backgrounds and support bases.
They are both courting a large block of voters who feel their voice has not been heard under the pro-business government of incumbent Lee.
(Editing by Robert Birsel)