Austria’s vice chancellor Heinz-Christian Strache has resigned after a damaging video of him allegedly offering lucrative government contracts in return for political support was published by two German newspapers.

The former leader of the far-right Freedom Party (FPO) said on Saturday he was stepping down and would be replaced by transport minister Norbert Hofer.

Mr Strache was shown in the video meeting a woman posing as a Russian oligarch’s niece in 2017 and apparently offering to funnel state contracts towards a company in exchange for political and financial support.

He announced his resignation at a news conference, in which he criticised the secret recording as a “deliberate political assassination”.
Earlier on Saturday, Austria’s chancellor Sebastian Kurz ruled out working with Mr Strache in a coalition government, according to a government source.

The scandal has come just a week before Austria votes in elections for the European parliament and could lead to a snap election.
Mr Kurz is expected to speak at 2pm on Saturday.

“This is huge. This has to be the end of Heinz-Christian Strache,” political analyst Thomas Hofer said before the resignation.
Norbert Hofer, who will replace Mr Strache as vice chancellor and leader of the FPO, ran for president in 2016 and only narrowly lost.
The Kurier newspaper, without citing its sources, said Mr Kurz would prefer to call a fresh election rather than continue to govern with a partner whose image had been tarnished by the affair.

Mr Kurz’s party still leads opinion polls but they are far short of a majority. The only other party with enough seats for a majority is the Social Democrats, with which Mr Kurz, an immigration hardliner, has difficult relations.

Mr Strache has headed the Freedom Party since 2005, bringing it back to mainstream electoral success not seen since it was led by the charismatic Joerg Haider. It secured 26 per cent of the vote in 2017’s parliamentary election.

The video footage was reported on Friday by two of neighbouring Germany’s leading publications – the weekly Der Spiegel and the newspaper Sueddeutsche Zeitung – purportedly showing a meeting in Ibiza between Mr Strache, another party official and a woman purporting to be the niece of a Russian oligarch.

Mr Strache did not reply to a request for comment about the video. The times was not able to verify the authenticity of the footage independently and the German newspapers did not say how they obtained it.

The newspaper reports said the video appeared to be a sting operation.
The FPO co-chairman, Christian Hafenecker, said on Friday the party’s lawyers were evaluating the material.
Neither Mr Strache nor the FPO ever received or granted any benefits from the persons concerned, Mr Hafenecker said in a statement.
“Since the video was obviously recorded illegally, we are also preparing appropriate legal steps.”

The footage, recorded in July 2017 – months before the election that brought this government to power – showed Mr Strache talking to the woman.
In it, he appeared to offer to direct inflated construction contracts to a company in exchange for support for his party, though he also said he wanted everything to be done legally.

Vienna prosecutors said they would study the reports and decide whether there was sufficient cause to open an investigation, a spokesperson for the prosecutors said.

“The FPO is finished,” ran the headline in the tabloid Kronen Zeitung, which featured in the video since the woman said the oligarch wanted to buy a stake.

It remains unclear who was behind the recording.