Prosecutors in Malta have charged a prominent businessman as an accomplice in the 2017 car bombing that killed investigative journalist Daphne Caruana Galizia, in a case that has developed into a major political crisis for the government.

Yorgen Fenech, one of the Mediterranean island’s wealthiest tycoons, pleaded not guilty on Saturday night to a charge of complicity in the journalist’s murder and to another charge of being an accomplice to the bombing. He was arrested on November 20.

Fenech’s alleged ties to ministers and senior officials have also spawned a political crisis for the government of Prime Minister Joseph Muscat.

Official sources said Muscat was expected to make a statement announcing his resignation in a televised address on Sunday. No official statement has been issued.

“Protesters are demanding that his resignation is immediate,” Albert Galea, a journalist with the Malta Independent told Al Jazeera. “Ever since the arrest of Fenech there have been five protests and each time the crowds get larger and larger and all of them are calling for the same thing; that is [Muscat’s] immediate resignation.”

Protesters have been turning out in ever larger numbers to demand justice for the 2017 murder of journalist Daphne Caruana Galizia [Yara Nardi/Reuters]

Fenech, 38, was taken to court under a heavy armed police escort.

Dressed in a charcoal suit and dark glasses, shaven-headed Fenech stood up to hear the charges in a hushed courtroom less than a metre away from the three sons of Caruana Galizia, who were also joined by her husband Peter, her parents, Michael and Rose Vella, and her sisters.

The businessman made no application for bail.

Political implications

Fenech said when he spoke to journalists on Friday that the “truth will come out” and, in court filings, he has made clear he intends to implicate other key members of Muscat’s government, in both the murder plot and other corruption charges.

Police sources have said they regard Fenech, a hotelier and director of the Maltese power company, as masterminding the October 2017 killing. Three men have already been charged with having set off the bomb and are awaiting trial. They have all pleaded not guilty.

In court filings, Fenech has tried to implicate Muscat’s former chief of staff Keith Schembri, who was arrested on Tuesday in connection with the murder, but released without charge two days later.

Immediately after the hearing, the family of Caruana Galizia urged authorities to continue to investigate who else was involved in the murder.

The family said: “We now expect the Prime Minister to leave office, and parliament, with immediate effect to allow a free and full investigation into his and Keith Schembri’s role in Daphne’s assassination.”

Caruana Galizia wrote shortly before her death that corruption was everywhere in political and business circles in the tiny European Union nation.

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Maltese media reported earlier that Muscat planned to announce his resignation if charges were filed against Fenech.

Asked about this before Fenech was charged, a spokesman for the prime minister said that Muscat “has pledged various times he wants to see this case through. He will make announcements in due course”.

Fenech was arrested on his luxury yacht as he allegedly attempted to leave the island, days after another man, Melvin Theuma, was arrested in a money-laundering case and immediately told police he had been the middleman in the murder plot.

Theuma offered information in return for a pardon, which was accepted, but later turned down another request for a pardon by Fenech.

Muscat has been in power since 2013, having won two general elections in a row, the last in 2017.

His Labour Party is expected to hold a leadership election in January.

Schembri, a close friend and right-hand-man of Muscat, and former Tourism Minister Konrad Mizzi both resigned on Tuesday.

Neither Schembri or his lawyers have commented since his resignation or arrest. He previously denied any wrongdoing. Mizzi on Tuesday denied any business links with Fenech and any wrongdoing.

Caruana Galizia, 53, was killed by a car bomb as she drove out of her home in Bidnija, 11 kilometres (seven miles) from Valletta, just half an hour after writing a blog describing Schembri as “a crook”.

Investigators subsequently told a court that the bomb was set off from a yacht off Valletta harbour.