(CNN) -- South Korean prime minister-designate Kim Tae-ho and two other nominees announced their resignations Sunday, amid corruption allegations that surfaced during their confirmation hearings, the state-run Yonhap news agency reported.

The resignations are a blow to the cabinet re-organization efforts of President Lee Myung-bak. The cabinet re-shuffle was an attempt to refresh the government for the second half of his term.

But Kim bowed to pressure from opposition parties and critics over discrepancies in his testimony during his confirmation hearing, and alleged shady relations with a convicted local businessman, Yonhap reported.

Kim was accused of receiving tens of thousands of dollars in 2007 in illegal political funds from the businessman, the news agency said.

Following Kim's announcement, the appointees to two other cabinet posts also resigned. The two nominees had been under scrutiny for unethical and alleged illegal activities, according to Yonhap.

Kim, a former governor who just turned 48, would have become the country's first prime minister under age 50 in four decades.

"I feel really sorry for causing trouble to all the people with my own problems," Kim said in a nationally televised announcement. "I'm resigning from the post today with the thought that I should no longer be an obstacle to President Lee Myung-bak in his carrying out of state affairs."

A presidential spokeman said the president will support Kim's decision, Yonhap reported.

The opposition Democratic Party praised the announcement.

Former Prime Minister Chung Un-chan resigned late last month after he failed to win parliamentary approval to stop relocation of government offices out of the capital, Seoul.

The failure was a major setback to Lee's government and a sign that his party is losing clout.