By Luiza Ilie
BUCHAREST (Reuters) - Romanian Finance Minister Darius Valcov resigned on Sunday, leftist Prime Minister Victor Ponta said, after prosecutors opened a criminal investigation against him into suspected abuse of power in a former role as a mayor.
Valcov is the most senior sitting Romanian politician to resign because of corruption allegations amid a flurry of high-level investigations and graft trials over the past two years. He has denied taking a bribe.
Romania is seen as one of the European Union's most corrupt states but its prosecutors and magistrates have won praise from Brussels for crackdowns that have seen many members of parliament face trial for graft-related offences.
Anti-corruption prosecutors said on Friday they had opened a criminal investigation against Valcov on suspicion of favoring a company for a public works contract in exchange for about 2 million euros during 2010-2013 while he was a mayor.
"I spoke with Darius Valcov today at lunch and he handed me his resignation," Ponta told television station Romania TV.
Ponta said he had accepted the resignation but gave no further details as to why Valcov had quit.
Neither Valcov nor ministry officials were immediately available for comment.
Ponta said he would propose a replacement after Valcov finalised a new fiscal code in the coming days to cut taxes and presented it to the government for approval "because it is important for Romania to have this project".
Ponta and Valcov announced plans in February to cut all major taxes between 2016 and 2019, a move analysts said could take an unsustainable toll on the budget.
A former two-term mayor turned senator in parliament, Valcov took over as finance minister in December in a cabinet reshuffle following Ponta's defeat in the 2014 presidential election. He had previously been the budget minister, a portfolio that was merged with the Finance Ministry post in the reshuffle.
President Klaus Iohannis asked Ponta earlier on Sunday to start the process of replacing Valcov, saying he was "affecting the activity and credibility of the government".
The investigation is another blow to Ponta, after he was surprisingly defeated in November's presidential election. Ponta’s father-in-law and brother-in-law are under criminal investigations in separate cases.
His ruling Social Democrats have a party congress this month where his leadership may be challenged, while opposition center-right politicians have said they aim to file a no confidence vote in parliament this year. The next parliamentary election is due at the end of 2016.
(Editing by Alison Williams)