Bulgarian Interior Minister Rumen Petkov resigned yesterday, prompted by a failure to tackle rampant organised crime that could threaten the government's survival and cost the Balkan state millions in EU aid.

His resignation followed a call from Brussels for "urgent action" after the contract killings against two prominent Bulgarians and a scandal in which two senior police officers have been accused of passing secrets to shadowy businessmen.

Fighting pressure from opposition parties and criticism from the European Union, Prime Minister Sergei Stanishev had initially refused to sack Mr Petkov and his coalition agreed a deal to reform the scandal-tainted interior ministry.

Mr Petkov, too, had originally refused to step down and he remained defiant in his announcement.

"This decision is a result of my firm will to submit the interest of the political system and to the Bulgarian state," Mr Petkov said. "It is not a sign of weakness, or a giving in to pressure... I am resigning to allow for a better state."

Bulgaria overcame scepticism from some EU members to join the bloc in 2007 despite criticism from EU diplomats that it had allowed a "climate of impunity" and its organised crime gangs controlled large parts of the economy.

The EU's executive Commission will publish a report this summer on Bulgaria's progress in fighting graft and crime. The poorest EU state, Bulgarian may face sanctions and risks losing millions in aid if the executive deems it has not done enough.