Czech PM Petr Necas to resign: 'Mr Clean Hands' to quit in effort to end political turmoil over aide spying and corruption scandal

Up to £5m in cash and 10kg of gold seized in raids

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He was once known as 'Mr Clean Hands' in a country troubled by corruption, but the Czech Prime Minister, Petr Necas, has been forced to resign after his chief of staff was accused of abusing state security apparatus to spy on three people including the First Lady.

Jana Nagyova and seven other people linked to the government were arrested last week during an operation by the organised crime unit. While Ms Nagyova and the Prime Minister have insisted their relationship was purely professional, their close ties and the seriousness of the allegations have raised questions about his judgement and forced coalition partners to withdrawn their support.

Up to £5m in cash and 10kg of gold were also seized in the raids on government offices, banks and private homes. Czech media said it was the biggest anti-graft operation in 20 years in the country, which languishes low in the European ratings on Transparency International's corruption index.

The other seven arrested include the current and former heads of military intelligence and former lawmakers from the outgoing prime minister's party. Although the exact nature of the charges have not been revealed, they are understood to relate to bribery and abuse of power.

At the heart of the scandal is the close relationship between Mr Necas and Ms Nagyova. The Prime Minister has denied they had anything but a professional relationship, but he alluded to personal concerns on Sunday when he announced his resignation.

“I am personally convinced that I did not do anything dishonest and that my colleagues have not done anything dishonest either, he said, but added: “I am aware fully aware how the twists and turns of my personal life are burdening the Czech political scene and the Civic Democratic Party.”

Ms Nagyova is charged with ordering the Czech military intelligence agency to spy on three people. Lawyers involved in the case told Reuters news agency that they included the estranged wife of the Prime Minister. Mr Necas, 49, announced last week that he was separating from Radka Necasova, his college sweetheart and mother of his four children.

The State Attorney, Ivo Istvan, said Ms Nagyova's motive was “purely private”, but did not elaborate. Her lawyers have said she will deny some charges and argue on others that she acted in good faith.

The Prime Minister will officially announce his resignation later today, and will step down as chairman of his Civic Democratic Party, which has ruled in a coalition government since a 2010 election. The Civic Democratic Party will try and nominate a new Prime Minister, which must be approved by the coalition and the President.

If they fail, elections scheduled for next year may have to be brought forward.