Italian Industry Minister Claudio Scajola, one of Prime Minister Silvio Berlusconi's closest allies, resigned on Tuesday over reports that a shady businessman paid for most of his apartment.
Scajola, who denies any wrongdoing, announced his decision to quit at a news conference, saying: "I can no longer carry on as a minister".
The resignation was a heavy blow to Berlusconi and the first major change in his cabinet since the prime minister won the 2008 national election.
Commentators said, however, that it would not lead to a government crisis, rather only a cabinet reshuffle with Scajola's deputy in charge of communications at the ministry, Paolo Romani, in the best position to take over.
Mainstream newspapers and opposition leaders had been calling on Scajola to step down after repeated reports that he illegally used money from a businessman, who is now in jail on corruption charges, to buy a luxury apartment in Rome.
His position became untenable on Tuesday after Il Giornale and Libero, two newspapers close to Berlusconi, joined the growing chorus of doubters.
"Scajola must clear up everything or resign," ran the banner headline in Il Giornale, a paper owned by the Berlusconi family.
Scajola, 62, has been an key driver behind Italy's revival of nuclear energy and in other power schemes, including efforts to make Italy into a natural gas transhipment hub for Europe.
He also was instrumental in moving to liberalise the power and gas market.
Berlusconi, whose government has been rocked by a series of corruption scandals, said in a statement Scajola would prove his innocence and thanked him for his work.
The case surrounding Scajola involves a nine-room, 180 square metre apartment overlooking the ancient Colosseum which he bought in 2004 when he held a different cabinet post.
He says he paid 600,000 euros ($799,100), far below market value. But the two sisters who sold it said they received an additional 900,000 euros in 80 cashier's cheques from Scajola.
Scajola's name surfaced in a probe by magistrates in the central city of Perugia into irregularities in public works contracts to build the original site of last year's G8 summit in Sardinia and other major construction projects.
Magistrates believe the cheques came from funds traceable to a constructor who was one of four people arrested in February in a probe of suspected corruption in the awarding of public works contracts.
Scajola, who is not formally under investigation, said he was the victim of "a relentless media campaign" and reiterated that he did not know his apartment had been partially paid for by others.
Scajola was forced to quit as interior minister over a gaffe during a previous Berlusconi government in 2002, when he described as "a pain the ass" a government adviser on labour reform who was killed by Red Brigades militants.
ReutersLast Mod: 04 Mayıs 2010, 23:35