UPDATE 1-Austrian ex-chancellor quits as MP amid telecom probe
* Wolfgang Schuessel denies any wrongdoing
* Says needs to ensure no political interference with probes
* Conservatives in unwelcome spotlight (Adds quotes and background)
By Michael Shields
VIENNA, Sept 5 (Reuters) - Former Austrian Chancellor Wolfgang Schuessel said on Monday he would resign his seat in parliament amid a widening corruption scandal centred on Telekom Austria that has put the conservative People's Party (OVP) in an unwelcome spotlight.
His resignation -- and effective withdrawal from politics -- takes effect at the end of the week and follows extensive media reports about supposed slush fund payments to politicians and lobbyists during his time as chancellor from 2000 to 2007.
The former head of the OVP, which now governs in an uneasy coalition with Social Democrats, told a news conference he had a clear conscience but that an independent investigation had to be free of any political influence.
"It is factually unjust and irresponsible to link the OVP to the accusations that have arisen," he said, but added that "no one, not even I, can exclude that individuals may have deceived or abused my trust."
Telekom Austria, in which the state has a 28 percent stake, commissioned an independent panel on Friday to look into allegations of improper payments and compliance shortfalls. It is due to issue its report next year.
Telekom Austria was already reeling from an investigation into allegations that top managers manipulated the company's share price to earn millions in bonuses in 2004.
Now the company faces reports that bribery played a role in the state's awarding it and partners an emergency services radio network contract in 2004 and in the government's amending rules on access to telecom services to the company's advantage.
Investigators have also probed senior officials from Schuessel's period as chancellor for possible irregularities in privatising public housing and buying fighter jet aircraft.
Schuessel, 66, was chancellor in OVP coalitions with right-wing parties. He has been a regular MP since 2008.
Opposition parties are seeking a special session of parliament to look into the Telekom affair and other corruption scandals. The OVP is increasingly clashing with the Social Democrats over issues such as introducing a wealth tax.
With the OVP likely to face a strong challenge from the resurgent right-wing and anti-Europe Freedom Party, the next elections are due in 2013. (Editing by Mark Heinrich and Roger Atwood)
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