Athens - Greece's merchant marine minister resigned on Friday over allegations of unethical business transactions which were harming the reputation of the ruling conservative government.

Giorgos Vougarakis, 49, is the second minister to resign due to scandals since the conservative New Democracy Party was elected in September 2007.

He has been accused of setting up an offshore real estate company with his wife and using it to avoid paying property tax.

Voulgarakis has also been linked to a scandal involving a monastery in northern Greece which allegedly traded low value plots of land for prime real estate.

He has denied any wrongdoing.

Prime Minister Costas Karamanlis has accepted his resignation. He will be replaced by Anastasios Papaligouras, 60, a former justice minister.

Greece's fleet of ships is among the world's largest and shipping is the largest contributor to the country's GDP after tourism.

The conservatives, hit by a spate of scandals which have eroded their popularity, won a narrow victory in 2007 with 152 seats in the 300-seat parliament. (dpa)