The chairman of Nigeria's ruling People's Democratic Party (PDP) has resigned after being charged with conspiracy and fraud, state radio has said.

Vincent Ogbulafor submitted his letter of resignation amid mounting pressure after being charged with conspiring, along with four other people, to siphon off $1.5m in public funds while he was a government minister in 2001.

Ogbulafor, who has been granted bail, pleaded not guilty to the charges in the Abuja high court on Monday.

His trial will begin in late June.

The executive body of the PDP, which has dominated Nigerian politics since the country's return to democracy 10 years ago, is expected to meet on Friday to decide on his replacement.

New chairman

Ogbulafor's departure could allow Goodluck Jonathan, the new president, to handpick a replacement and unite the party before a presidential election scheduled for early 2011.

"It is not possible to believe there is no link between the pressure for Jonathan to run for president next year and the removal of the party's chairman," Bismarck Rewane, the head of Lagos-based consultancy Financial Derivatives, told the Reuters news agency.

"Ogbulafor's resignation opens the path for an alteration to the gentlemen's agreement of zoning the office of the presidency. They are likely to pick a new chairman willing to make these changes."

Ogbulafor said last month the party nominee should be from the predominantly Muslim north, abiding by the terms of an unwritten agreement that rotates the national presidency between the north and the mostly Christian south every two terms.

That would exclude Jonathan, a southerner who took power last week after the death of Umara Yar'Adua, from running for re-election in 2011.

Dubai arrest

Ogbulafor's resignation came as police in Dubai arrested a former Nigerian state governor also wanted on corruption charges.

James Ibori, one of Nigeria's most influential politicians, is wanted for questioning in Nigeria and Britain over allegations of money laundering.

Dubai police released Ibori after he was taken into custody late on Thursday, but kept his passport to prevent him from leaving the United Arab Emirates, officials said.

Last month Nigeria's anti-corruption police took Ibori into custody over allegations that $290m was stolen from Delta state government coffers while he was governor from 1999 to 2007.

But a violent crowd prevented police from arresting him in his hometown in southern Nigeria.

Nigeria's Economic and Financial Crimes Commission said it would also bring new charges against the politician, but would not elaborate.

Several of Ibori's associates are face money laundering charges in Britain, where a court froze $35m of his assets in August 2007 on suspicion they were the proceeds of corruption.