Lithuanian PM Gintautas Paluckas resigns amid scrutiny over family business ties

Lithuania's prime minister quits

Lithuania's Prime Minister Gintautas Paluckas said on Thursday he would resign, after facing pressure to do so over his business ties to a company owned by his sister-in-law.

Paluckas in a statement said his past mistakes had hindered the work of his government, prompting his "quick and confident decision" to resign.

Opposition parties in the Baltic country have criticised Paluckas for business dealings in which a company he co-owns sold electric batteries to another firm owned by his sister-in-law, in a deal financed by a government agency.

Paluckas had in recent weeks denied any wrongdoing.

The next prime minister will be picked by Paluckas' Social Democrat party, which holds 52 out of 141 seats in Parliament, said Mazvydas Jastramskis, a political analyst with the Vilnius Institute of International Relations and Political Science.

The head of the government gets appointed by a majority vote in Parliament, and Social Democrats will have a tough time negotiating for support from its two coalition partners, centre-left For Lithuania and populist Nemunas Dawn, which disagree with each other.

"Other parties do not seem eager to join the government," said Jastramskis.

Last week, Paluckas' sister-in-law's company said it would decline the government funding but denied wrongdoing, saying it made purchases from Paluckas' business following an open tender.

The For Lithuania party on Wednesday threatened to quit the ruling coalition unless Paluckas resigned, saying his position was untenable.