Under the deal, the ministry of the interior took a lease on offices owned by a private businessman for the work of the National Investigations Office (NPU), a police department investigating more serious cases of white-collar and other crime.

Addressing a news conference, Kresal said that she was tendering her resignation because she respected the authority of state institutions, even though she did not agree with the commission's findings.

All procedures that preceded the signing of the contract whereby the ministry took a lease on the building built by businessman Jurij Pogacar were conducted in a lawful manner and in good faith, said Kresal.

Pogacar is said to be an acquaintance of Kresal.

Kresal tendered her resignation to Prime Minister Borut Pahor on Tuesday after the national audit office expressed doubt as to the legality of the ministry's deal, but Pahor turned it down.

Kresal said today that she would remain at the helm of her Liberal Democratic Party (LDS), but that she would request that the party vote to decide if it wanted her as LDS president or not.

In the recent months Kresal was the main coalition partner to the Social Democrats of PM Borut Pahor whose minority government is experiencing a major drop in ratings and facing the threat of early elections by the end of this year, and her resignation has dealt a new blow to Pahor's government.