India opposition names new chief after shock resignation

India's main opposition party elected a new leader on Wednesday after the scandal-tainted incumbent resigned abruptly following a corruption scandal just over a year before national elections.

Nitin Gadkari, president of the Hindu nationalist Bharatiya Janata Party (BJP) since 2009, stepped down late on Tuesday over a probe into alleged misuse of funds for irrigation work in the western state of Maharashtra.

He is widely seen as having failed to rejuvenate the BJP, which has been out of power since 2004, and the disorderly transition at the top is a further blow as the party looks ahead to elections in early 2014.

Gadkari said he had decided to quit after income tax officers raided 11 offices in Mumbai on Tuesday to investigate funds generated by his company, but he denounced the probe as "a political conspiracy" hatched by the Congress party.

Last year, Gadkari was accused of using his political clout to acquire land at below the market rate for the construction of a dam.

Investigators are also conducting a financial probe of the Purti Group, a company headed by Gadkari which has offices all over India.

In many instances, details of directors and addresses of companies that have invested in the Purti Group have turned out to be false, with Gadkari's drivers, cook and house help shown as investors in the company.

"I have done nothing wrong but I have chosen to resign because I do not want the party's image to be maligned," he said.

"I will come back only when my name is cleared from the corruption cases."

The party hastily appointed veteran party leader Rajnath Singh, a 61-year-old parliamentarian and former state leader who served as BJP president from 2005 to 2009 when Gadkari took over. His new term will end in 2015.

"I am taking this post at a crucial time and it is my responsibility to consolidate the party and prepare for the elections. We have a big battle waiting for us," said Singh.

The BJP's woes come as the ruling Congress named Rahul Gandhi, scion of the Gandhi political dynasty, as its vice-president at the weekend. He is now expected to lead the party into the polls.

The BJP has generally failed to capitalise on a string of corruption scandals that have afflicted the Congress government, led by Prime Minister Manmohan Singh, since its re-election in 2009.

One of Rajnath Singh's first and most important tasks will be to choose the BJP candidate for prime minister in the general elections.

The party is seen as riven with internal power struggles, with controversial regional leader Narendra Modi pushing hard to be the 2014 prime ministerial candidate, which is being resisted by other factions.

Modi, whose image remains tarnished by religious riots in his home state of Gujarat in 2002, inspires loyalty from Hindu right-wingers and business groups, but others fear he is a polarising figure who does not have broad appeal.