ROME: Italy's Transport Minister Maurizio Lupi said he would step down on Friday after his ministry was embroiled in a corruption inquiry involving billions of euros in public works contracts.
Lupi has faced mounting pressure to resign since Monday, when police arrested four people in a sweeping investigation into the sort of graft that has long undermined Italy's chronically stagnant economy.
Lupi himself is not under investigation, but the links between the suspects and his ministry have raised an outcry and embarrassed Prime Minister Matteo Renzi.
Prosecutors are probing contracts worth 25 billion euros ($26.65 billion) for projects including a high-speed train line and Milan's Expo world fair.
During an interview with RAI state TV on Thursday, Lupi said he "never had favours or received anything" while minister. He is scheduled to address parliament on Friday, after which he said he would formally resign "because when you are personally dragged in, you have to respond" to allegations.
Renzi has faced widespread criticism for not doing more during his year in office to tackle rampant corruption, which deters foreign investment and bleeds state coffers.
Lupi is a member of the New Centre Right (NCD) party that governs in coalition with Renzi, and his resignation creates a delicate political problem for the 40-year-old prime minister, who must replace him while maintaining the balance of his left-right ruling coalition.
Raffaele Cantone, the head of the nation's anti-bribery authority and a former magistrate, is a possible replacement, parliamentary sources told Reuters, as is a former NCD minister, Gaetano Quagliariello.
A former top official in Lupi's department was among those arrested, and the warrants allege that one of the other suspects helped secure a work contract for Lupi's son.
Prosecutors said the same suspect, a businessman involved in lucrative public works contracts, had given the younger Lupi a 10,000-euro ($10,716) Rolex watch as a graduation present.
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