While apologetic for the controversy his nomination caused, Chung was bitter in his statement read to a news conference, saying his private life was "maliciously distorted and trodden upon" by political interests.

Chung came under fire after he was found to have received a monthly salary of about 100 million won (US$89,500) while working for a Seoul-based law firm for seven months in 2008, after serving briefly on Lee's presidential transition team.

The large paycheck cast him as highly privileged, an image that does not mesh well with the public or, as critics argue, the image of the top auditor.

The opposition also highlighted the nominee's role as a prosecutor in investigating a financial scam that involved President Lee, who was later cleared of charges. In the case widely known as the "BBK scandal" named after a company co-established by Lee and a Korean-American businessman, the partner was sentenced to jail for embezzlement and stock price manipulation. Lee won the presidential election in 2007 by a landslide in spite of the scandal.

Lawmakers also suspected Chung led the government's alleged surveillance of civilians as Lee's chief civil affairs aide.

On Monday, the ruling Grand National Party (GNP) declared him "unfit" for the position and asked him to bow out. Chung criticized the party, saying demanding him to resign before a confirmation hearing "was nothing short of a death sentence."

The unexpected move by the GNP irked the presidential office, which expressed "deep regret" at the GNP's decision. Political analysts saw the clash as a sign that the Lee administration was waning in power with two years left in its five-year term that ends in February 2013.

Critics have said the president's repeated appointment of his close confidants to key ministerial posts runs against a "fair society" drive that he launched as he passed the halfway point of his term last summer.

(Yonhap News)