Nairobi - Kenya's Finance Minister Amos Kimunya resigned Tuesday over claims of corruption involving the sale of a luxury hotel in Nairobi to Libyan investors.

A report last week by the attorney general recommended that Kimunya, of President Mwai Kibaki's Party of National Unity (PNU), quit while the sale was probed. Members of parliament (MPs) also passed a motion of no confidence against him.

Even as he announced his resignation, Kimunya maintained his innocence, saying he had simply asked his ally Kibaki to let him stand aside while the sale was investigated.

Government spokesman Alfred Mutua said the move was only temporary and that the minister would not be replaced, the BBC reported.

While MPs were almost unanimous in condemning Kimunya, he was not legally obliged to resign and could only be removed by Kibaki.

The issue is the latest problem for Kenya's grand coalition government, which was formed this year to end months of brutal violence following the disputed December presidential elections.

Raila Odinga, who claimed that Kibaki stole the election from him, was appointed prime minister as part of the deal.

Odinga's Orange Democratic Movement (ODM) and the PNU have been at loggerheads over several issues, including an amnesty for youths awaiting trial for their part in post-election violence.

Kenya's Central Bank sold the Grand Regency Hotel for 2.1 billion Kenyan shillings (44.4 million dollars), but members of parliament claim the true value was closer to 7 billion shillings.

Kimunya said that there was only one bidder and the higher valuation was inaccurate.

However, the fact that no attempts were made to attract other bidders and thus push up the price has also drawn fire.

Kenya and Libya last year signed a trade pact giving Libya a head start on investing in Kenya after a meeting between Kibaki and Libyan leader Moamer Gaddafi.

Lands Minister James Orengo, a member of the ODM, has said he wants to revoke the sale, which his ministry apparently pushed through without his knowledge.

Corruption is considered rife in Kenya, and both ordinary Kenyans and international donors have welcomed the vigorous response against Kimunya.

The Grand Regency is also part of an earlier corruption scandal, in which the government paid businessmen Kamlesh Pattni millions of dollars in a gold export scheme that turned out to be a scam.

Pattni gave the hotel to the Central Bank, allegedly in return for an amnesty for corruption charges related to the scandal. (dpa)