NEW DELHI (Reuters) - Junior foreign minister Shashi Tharoor, among the country's few reformist politicians, resigned on Sunday over allegations of corruption in winning a cricket league franchise, as the government tries to pass reform bills in parliament.
The row Tharoor's role in a southern city winning a $333 million bid for the cricket franchise in the Indian Premier League, sparked uproar in parliament last week and held up discussions on the budget.
"Dr Tharoor submitted his resignation from the council of ministers to the prime minister today," a statement from the Prime Minister's Office (PMO) said late on Sunday.
Prime Minister Manmohan Singh, who met Tharoor twice on Sunday, has forwarded the resignation to President Pratibha Patil for acceptance, the statement said.
The resignation of Tharoor is widely seen as a setback to younger elements in the Congress government as he was among the few political leaders watched closely for their ability to push an agenda to modernise India against conservative figures in Congress focused more on political convenience.
Some experts say Tharoor's resignation will be seen as a victory for the opposition parties, who were calling for his dismissal and have been able to force the government onto the back foot on reforms bills such as opening up the pension and insurance sector to foreign investments.
The controversy erupted after Lalit Modi, the chief of the Indian Premier League of cricket, said the winning consortium allotted stakes worth about $15 million for free to a woman Indian media identified as Tharoor's girlfriend Sunanda Pushkar.
Modi said Tharoor had asked him not to reveal the shareholding details of the consortium.
Tharoor, an author and a former U.N. official, denied this, but with pressure mounting on Tharoor and Pushkar to come clean on the nature of the deal, Pushkar's lawyer said on Sunday she had decided to give up her allotted stakes.
Tharoor, who issued a statement in parliament, was asked to resign after a meeting of the Congress core committee, including Singh and party chief Sonia Gandhi.
"Congress has taken a considered, mature decision," said party spokesman Abhishek Manu Singhvi.
Since winning re-election last May, the Congress-led coalition is on the backfoot in the parliament session.
It is trying to pass budget and reform legislation with a thinner majority after two allies pulled out of the ruling coalition to protest at a controversial women's bill.
(Additional reporting by Nigam Prusty; Editing by Alison Williams)