BUCHAREST (Reuters) - Romanian Prime Minister Victor Ponta was indicted on Thursday on charges of forgery, money-laundering and being an accessory to tax evasion, piling pressure on a premier also facing mounting criticism and elections.
Ponta, who was first charged in August, has repeatedly dismissed the accusations, resisted calls to resign and on Thursday hit out at a "totally unprofessional" prosecutor, saying the charges had been fabricated.
He has so far had the backing of his leftist party and its allies to stay in power. However in his first comments since the indictment, party chief Liviu Dragnea, while reiterating his support, also left the door open for Ponta to quit.
Ponta, who took power in 2012 as the country's youngest ever premier, will become Romania's first sitting prime minister to be tried for graft.
The case, the biggest yet in a sweeping crackdown on corruption, will now go to Romania's top court, though no date was set. Prosecutors have said he will remain free during the hearing.
"In a normal country, the impact from such a move (the indictment) would be radical and the prime minister immediately would quit his job," said political analyst Cristian Patrasconiu.
"(The indictment) dramatically narrows any space of political manoeuvring by Ponta. He has no future but he will cling to power."
Ponta was already wounded by a shock presidential election defeat last November and faces a national election next year.
The indictment comes at a delicate time for his government, which has just pushed through a divisive tax-cutting programme and may soon start talks for a new aid agreement with the International Monetary Fund.
After touting Romania's prospects for strong economic growth in a Facebook post, Ponta said the country's only problem was "the obsession of a totally unprofessional prosecutor to assert himself in his career by inventing and imagining untrue deeds and situations from 10 years ago".
He did not refer to any prosecutor by name.
Romania has been dogged by political instability since shedding Communist rule in 1989, but markets appear to have shrugged off the corruption case so far.
The leu recovered its earlier losses to trade flat against the euro at 4.416 by the close of trade on Thursday.
Under Romanian law, President Klaus Iohannis, a rival of Ponta's who used to head the main opposition National Liberal Party, has the power to choose a new prime minister if Ponta steps down. Iohannis could try to cobble together a coalition of the liberals and smaller parties.
"A departure of Victor Ponta from the government could pose problems for the party because ... we have no guarantee President Klaus Iohannis would appoint another prime minister from the party," Social Democrat party leader Dragnea told B1 TV.
"There are no signs that the party wouldn't continue to support Victor Ponta but his own decision is very important. It is important that he is able to organise his thoughts. Based on what he decides we will discuss in the party."
The ruling party's executive committee will discuss the issue at a meeting on Monday.
Iohannis, who had called on Ponta to resign when the case first began, said Romania's image would suffer because of it.
"In my view, the situation is more and more problematic for the prime minister, for the government and for the Social Democrat Party," Iohannis told reporters. "But we must admit that Romania's image has the most to suffer from this issue."
The inquiry into Ponta mainly concerns his time as a lawyer and accuses him of colluding with Dan Sova, a former transport minister in his cabinet who is also being investigated for corruption.
Thanks to a comfortable majority in parliament, Ponta has survived three opposition censure motions, most recently in June. He has vowed to serve a full term, but he did resign as head of the Social Democrat party.
Writing by Matthias Williams; Editing by Kevin Liffey and Andrew Heavens