A near-optimal resource allocation method is provided for a Multiple-Input Multiple-Output (MIMO) relay scheme in which the source and relay nodes have only partial channel state information (CSI), obtained through finite rate feedback, and the powers of the source and relay nodes are constrained. Power on/off beamforming is employed at the source and relay nodes in which the receiving node feeds back the index of a beamforming matrix selected in accordance with the channel state. Using channel statistical information, the exemplary method allocates time between the first stage and the second stage of the relay transmission, and power between the source and the relay node. With only limited CSI feedback, the resource allocation method enjoys a considerable performance advantage over arrangements with no feedback.