A figure close to Israeli Prime Minister Benjamin Netanyahu has agreed to turn state’s witness in a case investigating alleged corrupt dealings between the government and telecom group Bezeq – the latest blow to a leader engulfed by several scandals.

Communications Ministry head Shlomo Filber, identified by Israeli media as a “confidant” of the Prime Minister, was arrested on Monday along with several executives at Bezeq, the country’s biggest telecoms group.

It is alleged Walla, a news website owned by the company, gave Mr Netanyahu’s government favourable coverage in exchange for regulatory benefits.

Benjamin Netanyahu announces he will stay in office despite police recommendation

Mr Netanyahu is not named in the case but is expected to be questioned. All parties deny the allegations against them.

On Wednesday Ynet News reported Mr Filber had agreed to testify for the state – an added headache for Mr Netanyahu, who is facing several other investigations.

Last week police announced they had enough evidence to recommend indicting the Prime Minister on corruption charges in two cases regarding the alleged acceptance of “inappropriate” gifts from wealthy supporters and allegedly trying to bribe a newspaper publisher for favourable coverage.

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The two cases were widely perceived to have reached a turning point after the leader’s former chief of staff, Ari Harow, agreed to turn state’s witness in August.

Mr Netanyahu is also embroiled in a scandal in which close associates have been accused of conflict of interest in the purchase of $2bn (£1.4bn) submarines from Germany.

And on Tuesday, police alleged his former spokesperson tried to bribe a judge to drop a fraud case against Mr Netanyahu’s wife, Sara.

Police have said Mr Netanyahu should face charges twice before, in 1997 and 2000. On both occasions prosecutors decided not to take action.

The potential charges will now be referred to Israel’s attorney general’s office which will decide whether to bring a prosecution.

The government of his predecessor, Ehud Olmert, collapsed not because he faced indictments for accepting bribes and for obstruction of justice, but because his allies abandoned the ruling coalition.

Citing the intense public scrutiny and the fact some allies are remaining silent or beginning to desert him, opposition politicians are calling on Mr Netanyahu to resign.