Brazil’s ruling politicians have been shaken by a scandal involving prostitutes, suitcases full of lobbyists’ cash and an apparent violation of bank secrecy laws that brought down the finance minister and again raised questions about the leadership of President Luiz Inacio Lula da Silva.

The architect of Brazil’s economic recovery and market-friendly fiscal policy offered his resignation today after becoming caught up in a political scandal, Brazil’s Finance Ministry said.

The Brazilian government said yesterday that it will not renew a $14bn (€10.8bn) standby credit agreement with the International Monetary Fund, a decision that drew applause even from the opposition.