Vajpayee 'offer to quit' rejected

Vajpayee's government has been rocked by political and financial scandals, and an inability to find middle ground with Pakistan over Kashmir

By staff and wire reports

NEW DELHI, India -- Indian Prime Minister Atal Behari Vajpayee offered to resign during a meeting with lawmakers from his Bharatiya Janata Party (BJP) on Tuesday, a minister said.

The offer was made following a series of scandals that have rocked Vajpayee's coalition government, Parliamentary Affairs Minister Pramod Mahajan told reporters.

However, he said senior cabinet colleagues unanimously refused to allow him to quit and persuaded him to abandon his offer.

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A meeting of the National Democratic Alliance, a score of parties that Vajpayee gathered to form a government in October 1999, is expected to take stock of the situation at a second meeting on Wednesday.

"At the BJP parliamentary party meeting this morning Prime Minister Vajpayee did express his desire to quit office in view of his inability to have the NDA function in a coherent and disciplined manner," Mahajan was as saying.

"Party members reacted sharply to the PM's remarks and said that Vajpayee could not be allowed to leave."

According to media reports, Vajpayee, 76, referred to frequent reports about his health, and his two knee operations, and said he could resign on those grounds.

Pressure from inside, and out

Vajpayee has come under growing pressure from the opposition and from within his own government following his fruitless talks earlier this month with Pakistan's military leader General Pervez Musharraf.

Earlier this year, journalists from the Internet Web site tehelka.com, posing as arms dealers, secretly filmed a string of politicians, defense bureaucrats and military officers apparently accepting cash to push a fake arms deal.

The scandal led to resignations of the then Defence Minister George Fernandes and other government officials.

Meanwhile, Vajpayee has also suffered as a result of a scandal over huge losses incurred by following the collapse of the country's largest mutual fund, Unit Trust of India (UTI).

Vajpayee (right) and Pakistan's Pervez Musharraf failed to agree over Kashmir during their summit in Agra

India's Central Bureau of Investigation, similar to the United States' FBI, has accused the UTI's ex-chairman and three senior trust officials of wrongfully causing losses of 328 million rupees ($7 million) to the trust.

Financial scandal

The investigators alleged the officials ignored advice from the trust's equity research wing and bought shares of a north Indian software company, Cyberspace Ltd., at an exorbitantly high price in July 2000.

Cyberspace, implicated in other fraud cases, has since gone bust.

Thousands of working-class investors, many of whom invested their life savings in the fund, have been forced to scrap plans for new homes and college educations for their children.

On Monday Sanjay Nirupam, deputy of the Shiv Sena Party, claimed in parliament that senior officials of the prime minister's office were part of the scam.

However, Mahajan denied reports that the UTI issue was discussed at Tuesday's coalition meeting.

But by far the biggest disappointment for Vajpayee's government has been the dispute with Pakistan over Kashmir.

The rival neighbors, both of which are armed with nuclear weapons, have long been at odds over control of the Himalayan territory.

India claims the entire Jammu-Kashmir region while Pakistan supports self-determination.

A cease-fire line from the 1971 war divides the territory between them, with two-thirds in India and the remainder under Pakistan's control.