NEW DELHI, Nov 7: Indian Foreign Minister Kunwar Natwar Singh resigned from his job on Monday following allegations that he bribed former Iraqi president Saddam Hussein in 2001 to allot him a share from the lucrative UN-sponsored oil-for-food deal.

Mr Singh’s resignation as foreign minister was accepted by Prime Minister Manmohan Singh and is believed to have followed an intense power struggle led by Defence Minister Pranab Mukherjee.

Mr Mukherjee supports close ties with the United States as opposed to Mr Singh’s preference for China and Russia as crucial allies. Mr Mukherjee also supports the Indian army’s hardline position on Siachen and the issue of demilitarisation in Jammu and Kashmir.

Accepting his resignation, the prime minister said Natwar Singh would remain a cabinet minister without portfolio, indicating that although he was defeated in the intra-Congress party battle, he was not quite vanquished. A couple of hours earlier Mr Singh gave a hint of the battle ahead.

In his last act as foreign minister, Mr Singh had a telephone conversation with his Chinese counterpart Li Zhaoxing. More importantly, an Indian foreign ministry spokesman spelt out the details of the conversation, an indication that Mr Singh had set his seal on a vital segment of India’s foreign policy. “During the conversation, the two ministers reviewed bilateral relations, and also discussed the forthcoming IAEA Board of Governors Meeting on the Iran nuclear issue,” the Indian spokesman said.

“They agreed to remain in close touch and to work for a consensus on the matter. They have also been in touch with Russian foreign minister and have a broad understanding that the matter should remain out of the Security Council and a consensus should be worked out in consultation with the EU-3 and Iran.”

Since Prime Minister Manmohan Singh would be keeping the foreign minister’s portfolio, it is likely that Pakistan’s Foreign Minister Khursheed Mehmood Kasuri may have to deal with one of the two junior ministers in India’s external affairs ministry during the Saarc summit in Dhaka later this month.

Analysts and diplomats did not see any other significant change in the India-Pakistan rapprochement process.

Amid pressure from the opposition and with parliament due to reopen on Nov 23, the government on Monday appointed former Indian chief justice R.S. Pathak to head a judicial inquiry into oil for food scandal, involving Natwar Singh.

UN investigator Paul Volcker in his report said that Natwar Singh and the Congress paid bribes to Iraqi authorities to buy oil in the UN sponsored oil-for-food programme. Both have denied Mr Volcker’s allegations. The Congress officially pleaded that Mr Singh’s resignation was not an acceptance of the Volcker report, but a way to avoid any perceived conflict of interest if he had stayed on as foreign minister.

On Sunday, the Indian government appointed former diplomat Virendra Dayal as head of an independent inquiry committee, which will study the UN Volcker report.

Mr Dayal, as special envoy of the government, will liaise with the UN and its members to collect relevant material.

Meanwhile, both the opposition National Democratic Alliance and the ruling Congress party have written to UN Secretary General Kofi Annan, asking for all relevant material and documents based on which Volcker report was published. “The party has taken this action due to the larger morality issue involved, because we are sure that we have been implicated in it wrongly. We are the oldest party and we have to keep our legacy intact,” said Ambika Soni, Congress party spokesperson.

In the NDA’s letter to Mr Annan, signed among others by former prime minister Atal Behari Vajpayee, the alliance urged the UN chief provide written documents indicting Mr Singh.