India's Foreign Minister is sacked over oil-for-food

India's Foreign Minister became the first political casualty of the Iraq oil-for-food scandal yesterday when he was dismissed after being named in the Volcker report as one of thousands of politicians and companies alleged to have illegally profited from the programme.

Natwar Singh was stripped of his post after an hour-long meeting with the Indian Prime Minister, Manmohan Singh. He had been refusing to resign for several days .

The naming of a senior government minister in the report has rocked India, but Mr Singh's dismissal may not be enough to quell the scandal. The ruling Congress Party was also named in the report as having illegally profited from Iraqi oil sales. Both Congress and Mr Singh have denied any wrongdoing.

While it does not specify why they got allocations, the report does detail similar cases in which foreign politicians were paid in this way for backing the Iraqi regime.

The Bush administration has been accused of using the scandal as ammunition against the UN. But in India, the scandal could not have come at a worse time. Indians were already digesting the revelation that many of the country's most senior political figures were on the payroll of the KGB during the Cold War in a book published last month. Now they are faced with new allegations of corruption in the government.

For Natwar Singh, who was leading calls for India to be given a permanent seat on the UN Security Council, and the Congress Party to be accused of taking bribes from Saddam Hussein is a serious blow.

India has ordered its own judicial inquiry into the allegations. Natwar Singh will remain in the cabinet until the end of that inquiry, demoted to Minister without Portfolio. The Prime Minister will temporarily take over the foreign ministry.