Natwar Singh, a minister without portfolio, on Monday met party chief Sonia Gandhi and spoke by telephone to Prime Minister Manmohan Singh, who is in Moscow, to discuss his resignation, party spokesman Anand Sharma told reporters on Tuesday.
 
"He informed the prime minister of his decision to resign," Sharma said.

"He will be handing over the resignation soon after the prime minister's return to New Delhi."

The prime minister is scheduled to return to the Indian capital on Wednesday.

The decision came amid a weeklong boycott of parliament by the opposition, which has demanded that Natwar Singh step down.

Singh, a former external affairs minister, was stripped of that portfolio after an independent UN inquiry implicated him, the Congress party and scores of private companies as illegal beneficiaries of the oil-for-food programme during Saddam Hussein's rule in Iraq.

Denial

He has denied any wrongdoing in the $64-billion programme, which allowed Iraq to sell oil to help ordinary Iraqis cope with UN sanctions imposed after Iraq's 1990 invasion of Kuwait.

The UN report said Saddam awarded contracts for humanitarian supplies in return for kickbacks.

India's government has started an inquiry into the UN report, and the prime minister has pledged to punish those found guilty.

On Monday, Gandhi removed Natwar Singh from a key party committee.

He had earlier resisted demands by the opposition Bharatiya Janata Party to resign, saying that such a step would be tantamount to an admission of guilt.