Czech Prime Minister Petr Necas is to formally resign on Monday over a corruption and spying scandal involving his top aide, plunging the recession-hit EU state into fresh political turmoil.
The crisis was sparked by the indictment on Friday of Necas' chief of staff -- and alleged lover -- Jana Nagyova with bribery and complicity in the abuse of power.
Police accuse her of asking military spies to tail Necas' estranged wife Radka. The 48-year-old prime minister had announced earlier last week that his marriage was over after 25 years.
Seven other senior figures in Necas' centre-right administration -- including military intelligence heads and former lawmakers -- have also been charged with corruption, among other alleged crimes.
"I am aware of my political responsibility," Necas told reporters Sunday as he announced his intent to resign to members of his three-year-old minority coalition government, which has survived eight confidence votes.
The massive graft scandal erupted Thursday when police raided the cabinet office, defence ministry, villas and a bank in a dramatic swoop which turned up large stashes of cash and gold.
An EU member state of 10.5 million people, the Czech Republic has been plagued by corruption since it emerged as an independent state after its 1993 split with Slovakia.
Last year, corruption watchdog Transparency International ranked the Czech Republic as worse than Costa Rica and Rwanda in terms of graft prevalence.
Necas' leftwing rival President Milos Zeman, who under the constitution has the power to decide on a new government or call snap elections, has so far kept mum about what action he will take.
"In my opinion the president does not prefer an early election," Necas told Czech TV after Monday morning talks with Zeman.
The president's chief of staff, Vratislav Mynar, told the Monday edition of the Lidove Noviny daily that in Zeman's "economic mind (snap elections) are the very last option".
Before the graft scandal erupted, Zeman had said he would like general elections to be held together with EU elections on May 24-25 to save taxpayer money.
Himself an ex-premier with political roots in the communist era, Zeman has been in power since his landslide presidential victory over right-wing rival Karel Schwarzenberg in January.
Zeman has made it clear that he favours the left-wing Social Democrat opposition, which opinion polls show will win any snap election.
The next regular polls are scheduled for May 2014. If Zeman fails to name a new prime minister, snap elections could be held within 60 days after parliament is dissolved.
Necas, a fiscal hawk who also stepped down as chairman of his Civic Democrats (ODS) party, was to hand in his resignation to Zeman at 1600 GMT on Monday.
Financial markets shrugged off the political firestorm Monday, having become accustomed to the instability plaguing Necas' minority administration.
"Mr. Necas' resignation means that the Czech ruling coalition is now attempting to muster a coalition to continue governing and avoid fresh elections," said William Jackson, an analyst with the London-based Capital Economic.
"Given that the coalition only held 100 of the 200 seats in parliament, and relied on independents to govern, there is a fair amount of uncertainty about the outcome," Jackson said in a statement.
Necas started off with 118 votes in the 200-seat parliament in July 2010, before seeing his majority dwindle over previous corruption scandals and party infighting.
His right-wing ODS party are partnered with the smaller TOP 09 and the centrist LIDEM.
Despite the turmoil, all sides -- including the left-wing opposition -- have agreed to ensure a smooth political transition to allow for the clean-up of devastating flood damage in the country. At least 12 people perished in the floods and around 19,000 were forced from their homes.
The scandal comes as the country continues to struggle financially. Heavily dependent on car production and exports to the crisis-hit eurozone, the Czech economy has been locked in a record-long recession lasting six straight quarters.