Saudi Interior Minister Prince Nayef was expected to become the new heir to the throne in the world's biggest oil exporter after the death of Crown Prince Sultan bin Abdulaziz Al-Saud on Saturday.

Prince Sultan, aged 80 according to government records, died in New York where he had been under treatment since mid-June. He was the Deputy Prime Minister, Minister of Defence and Aviation and Inspector General of Saudi Arabia.

Prince Sultan had been a central figure in Saudi decision-making since becoming defence minister in 1962 and was made crown prince in 2005. He served as the kingdom's defence minister for nearly five decades.

Saudi analysts predicted an orderly transition at a time when much of the Middle East is in turmoil after mass uprisings against autocratic leaders by citizens demanding democracy.

Saudi King Abdullah reacted to the 'Arab Spring' by ordering spending of $130 billion on social benefits, housing and jobs, but he and his new crown prince face challenges from Al Qaeda militants and civil conflict in neighbouring Yemen.

Saudi Arabia is also locked in a confrontation with Iran, accused by the United States of plotting to kill the kingdom's ambassador to Washington.

Earlier this month, the Saudi Interior Ministry accused an unnamed foreign power, widely assumed to mean Iran, of instigating protests by the Saudi Shi'ite minority in which 14 people, including 11 security officers, were injured.

King Abdullah is now likely to summon the Allegiance Council of the ruling al-Saud family, set up in 2006 to make the succession process more transparent, to approve his preferred heir.

In the past, the succession was decided in secret by the king and a coterie of powerful princes.

Most analysts believe the new crown prince will be Nayef, who was appointed second deputy prime minister in 2009, a position usually given to the man who is third-in-line to rule.

Nayef has been interior minister since 1975 and has managed the kingdom's day-to-day affairs during the absences of both the king and crown prince.

'The succession will be orderly,' said Asaad al-Shamlan, a political science professor in Riyadh. 'The point of reference will be the ruling of the Allegiance Council. It seems to me most likely Nayef will be chosen. If he becomes crown prince, I don't expect much immediate change.'

'Things are in order, thanks to the wise leadership represented in King Abdullah bin Abdulaziz,' Prince Talal bin Abdulaziz, a brother of both Abdullah and Sultan and member of the Allegiance Council, told reporters.

King Abdullah, who is in his late 80s, underwent back surgery earlier this month but left hospital on Saturday to continue treatment at a royal clinic, the Royal Court said in a statement carried by the official SPA news agency. He has been pictured since his surgery in apparently good health.

When the Allegiance Council convenes, the 34 branches of the ruling family born to the kingdom's founder King Abdulaziz Ibn Saud will each have a vote to confirm the king's nominee for crown prince or appoint their own candidate.

Saudi television broke its normal schedule early on Saturday to broadcast Koranic verses and footage of pilgrims circling the Kaaba in Makkah before announcing the crown prince's death.

Sultan's death also means King Abdullah will have to select new defence and aviation ministers, key posts in a country that spends billions of dollars on weapons procurement.

Prince Khaled bin Sultan, the son of the late crown prince, has been deputy defence minister since 2001 and is one candidate to replace his father as minister.

'There traditionally has been a way of balancing the power relationships within the family that are important,' said Robert Jordan, US ambassador to Riyadh from 2001-03.

'So I don't think we should automatically assume that Khaled bin Sultan will become the defence minister, although he has much experience and his father was in place for many years,' he added.-Reuters