Austria‘s Vice Chancellor Heinz-Christian Strache of the far-right Freedom Party has said he is stepping down after an embarrassing video of him was published by two German newspapers.

The far-right leader announced his resignation on Saturday, plunging the country into a political crisis just days before key European Union (EU) elections are held from May 23 to 26. He will be replaced by Transport Minister Norbert Hofer.

“I tendered my resignation as vice chancellor of Austria to Chancellor Kurz, and he accepted this decision,” Strache said in a televised statement.

Freedom Party (FPO) leader Strache was shown in the footage published on Friday by two German newspapers meeting a woman posing as the niece of a Russian oligarch in 2017, shortly before the election that brought him to power. In the video, he is apparently offering state construction contracts to a company in exchange for political and financial support.

“It was dumb, it was irresponsible and it was a mistake,” Strache later told a press conference, fighting back tears as he asked his wife and others to forgive him.

He maintained, however, that he had done nothing illegal and that it was a “targeted political assassination”.

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“In the cold light of day, my remarks were catastrophic and exceedingly embarrassing,” he said about the video, in which he also referred to party financing rules and how to work around them, but also insisted on having to act legally.

The German daily Sueddeutsche Zeitung and the weekly, Der Spiegel newspapers that published the footage said the hidden-camera recordings took place in a luxury villa on the island of Ibiza a few months before 2017’s parliamentary elections in Austria.

Both the newspapers said they didn’t have any firm information over who set up the elaborate sting.

Strache has already admitted the meeting took place but denies any wrongdoing. He told the Sueddeutsche Zeitung that “a lot of alcohol was consumed as the evening progressed” and that there was a “high language barrier” during the conversation.

Governing coalition under pressure

The scandal has led to speculation about the future of Austria’s governing coalition between Strache’s anti-immigration FPO and Chancellor Sebastian Kurz’s centre-right People’s Party.

Chancellor Kurz is expected to make a statement later on Saturday as speculation swirled about whether the damage would be limited to Strache or if Kurz would call a snap election only a year and a half after the coalition was formed.

Opposition parties including the Social Democrats, the liberal Neos party and the Greens called for an immediate ballot in the wake of the scandal.

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“I do not in any circumstances want my wrong behaviour to provide a pretext for the government to collapse,” Strache said at the press conference.

Al Jazeera’s Sonia Gallego, reporting from London, said there was “no other option” but for the FPO leader to step down given the scale of the scandal.

“It is an incredibly inglorious moment for him and his political career,” Gallego said.

“This has been quite an extraordinary downfall for the leader of the Freedom Party … just only a week to go until the European elections,” she added.

Gallego also described the timing of the incident as “very bad” for the FPO, and cautioned that it had raised “a lot of questions” about how it “finances its own coffers”.