Head of Mexico's main opposition party resigns

The head of Mexico's main opposition party resigned on Friday amid a scandal surrounding state finances, potentially removing a source of embarrassment for the front-runner in the country's 2012 presidential race.

Institutional Revolutionary Party (PRI) chairman Humberto Moreira said he would step down amid a tide of local news converge about a spike in the debt of Coahuila state when he was governor.

Moreira is an ally of PRI presidential candidate Enrique Pena Nieto, who has a 20-point lead in opinion polls in head-to-head contests against his closest rivals.

Moreira's plight had threatened to drag down the image of Pena Nieto, who had steered clear of any major scandals during his governorship of Mexico's most populous state.

"I will not allow a media war that is threatening to hurt my party, which has given me so many opportunities," Moreira said. "I am doing it because I trust a man who is the hope of Mexico, and that man is Enrique Pena Nieto."

The PRI, which ruled Mexico for 71 years until 2000, is vulnerable to attacks after its name became synonymous with corruption by the end of its reign.

Mexican President Felipe Calderon is barred from seeking a second term in office.

Moreira was Coahuila's governor from 2005 to 2011 and the state's debt more than tripled to nearly 34 billion pesos ($2.5 billion) by the end of his term.

The Mexican government ordered an investigation into suspected financial wrongdoing by the state of Coahuila in August.

Senator Pedro Coldwell will become the new party chairman, Moreira said.