India's junior foreign minister Shashi Tharoor has resigned amid controversy over his role with the winning bid for a new Indian Premier League (IPL) team.
A woman friend of Mr Tharoor allegedly received a free stake in the franchise.
Mr Tharoor denies any wrongdoing in the bid for the new Kochi cricket team, to be based in his home state of Kerala.
Tax officials are now investigating the IPL. In Bangalore, officials are angry that this week's semi-finals have been moved to Mumbai for security reasons.
Politicians and police in the city say they were not consulted about the move, which followed two small bombs before a game on Saturday.
The scandal surrounding Mr Tharoor has caused uproar in the closing week of the IPL's third season.
Budget discussions in parliament were held up on Friday as the opposition demanded clarity on his role in the deal and in the consortium that set up the Kochi team.
Cricket is almost a religion in India and its popularity with the masses means that politicians are keen to get involved with the sport, the BBC's Rahul Tandon in Calcutta says.
Press reports say Mr Tharoor, a former senior UN diplomat, was asked to resign by Prime Minister Manmohan Singh.
"The prime minister has forwarded his resignation letter to the president with a recommendation that it be accepted," the Press Trust of India news agency quoted a spokesman for the prime minister's office as saying.
President Pratibha Patil accepted the resignation late on Sunday, reports said.
The resignation followed a week of drama involving a public spat between Lalit Modi, the head of the IPL, and Mr Tharoor over ownership of the new cricket team for Kochi.
Mr Modi sent out a series of Twitter messages in which he "disclosed" the owners of the Kochi team and their shareholding stakes.
They included Sunanda Pushkar, a Dubai-based businesswoman and close friend of Mr Tharoor, Mr Modi said.
Mr Tharoor claimed he was just a mentor for the team and denied allegations that he was set to benefit financially.
He and Ms Pushkar say the stake was awarded as "sweat equity" in return for marketing and professional services to the new franchise - but Ms Pushkar has now offered to surrender the stake.
Kochi was sold to Rendezvous Sports World Limited for $333m at auction. It and Pune are to join the IPL from 2011, taking the total number of teams to 10.
Mr Tharoor has said that Mr Modi tried to persuade the owners of Kochi to drop their bid in favour of another city.
The IPL chief is also now in trouble, with income tax officials launching an investigation into his rapidly growing cricket empire, amid allegations of corruption and nepotism.
Indian media reports suggest there are plans to force him from his office as well.
The IPL has become a multi-billion dollar industry, which attracts some of India's wealthiest businessmen and women.