This Baltic nation's government collapsed Wednesday after its Interior minister was implicated in the bugging of rival politicians--a scandal that has been dubbed the "Estonian Watergate."
A day after Prime Minister Tiit Vahi fired the minister, Edgar Savisaar, the two main political parties said they could no longer work with his party and brought down the 7-month-old governing coalition.
Estonia has prided itself on pro-reform policies since gaining independence from Moscow in 1991, but the scandal underscores the difficulty of breaking with old Soviet habits. Savisaar has denied wrongdoing.
President Lennart Meri accepted the resignation of the Vahi government, which will serve as caretaker during talks on forming a new coalition.
Meri welcomed the resignation, saying it showed that rule of law works in his nation. "It is an indication that Estonia is standing on firm ground," he said.
The scandal developed after police found tapes of bugged conversations Sept. 22 at a Tallinn security company said to have close links with Savisaar, a former prime minister.
On the tapes, Savisaar, Vahi and opposition leader Siim Kallas bargain over forming a government after elections in March of this year. Savisaar was the kingmaker in stitching together a government from several groups, including his own Center Party.
The police raid was apparently prompted by complaints from lower-level government officials that their phones had been tapped.
Last week, Savisaar said it was he who had ordered the police raid.
Savisaar has been a major political figure in Estonia since the late 1980s, when he helped found the mass movement that led Estonia's independence drive. He was prime minister from 1990 to 1992.
Critics complained of his heavy-handed style and said he bent the law to serve his own political ends.
No dramatic changes are expected in the policies of Estonia's government, dominated by the Coalition Party and the Country People's Party.