The sprawling corruption scandal centers on the Porto Franco property company, which received a large state loan and struck a lucrative deal with city authorities in the capital, Tallinn.

Ratas stated that he had no knowledge of the alleged affair and had committed no wrongdoing, but chose to resign to take political responsibility for the scandal.

It is likely that Ratas will remain as head of a caretaker government until a new coalition can be formed.

The resignation brought to an end a coalition in the Baltic state on NATO’s frontline with Russia.

Estonian President Kersti Kaljulaid has 14 days to name the country’s new prime minister who would then have to be approved by parliament.