Malta's prime minister, Joseph Muscat, has told associates that he plans to resign imminently, the Times of Malta reported on Friday.

His decision was brought on by the political and legal crisis brought about by the investigation into the murder of journalist Daphne Caruana Galizia, according to the newspaper.

Authorities questioned Mr Muscat's right-hand man Keith Schembri this week in their investigation of the murder of Caruana Galizia, who was blown up by a car bomb in 2017.

Her family demanded on Friday that Mr Muscat resign, after Mr Schembri was set free overnight.

Mr Schembri, who resigned this week as Muscat's chief of staff, denies wrongdoing.

Earlier on Friday, Yorgen Fenech was released on police bail, and police sources said he would continue to be closely monitored to ensure he does not flee.

Mr Fenech, one of Malta's richest men, was arrested last week while trying to leave the country on his yacht. He has since been released and re-arrested four times as police struggle with a legal limit that requires suspects to be freed if they are not charged within 48 hours.

After two years of stalled investigations, the authorities have moved rapidly in recent days in the murder case.