Singh pledges to stay and fight as corruption row engulfs India

India's prime Minister, Manmohan Singh, a man who came to office with the reputation as a clean economist untainted by political squalor, has been forced to deny rumours he is to stand down amid a growing corruption scandal that has engulfed his government.

Faced by his worst crisis since he became Prime Minister in 2004, Mr Singh held a televised press conference and insisted he would stay and confront the allegations. "We have a functioning government, and whatever some people will say – that we are a lame-duck government, that I am a lame-duck prime minister – we take our job very seriously," he said in the hour long session during which he at times looked unsettled and unconvincing. "We are here to govern and to govern effectively, tackle the problems as they arise, and get this country moving forward."

In recent months, Mr Singh, 78, and his Congress Party-led coalition has been rocked by a relentless series of corruption allegations, ranging from the preparations for the Commonwealth Games to the allocation of telecoms spectrum that may have cost the country up to £24bn in lost revenue. The row has taken the momentum out of the government's second term and one minister – a member of a coalition party who was forced to resign – has been arrested and is being questioned by federal investigators.

Mr Singh admitted: "Things are not entirely the way I would like them to be but, quite frankly, I never felt like resigning because I have a job to do."

The Prime Minister has a full three years left in office, but there has been much speculation as to whether he will last the course. A key talking point is whether Rahul Gandhi, the son of the late Rajiv Gandhi and widely tipped as a future prime minister, is yet considered ready to take on the position, or if he even wants the job. His mother, Sonia Gandhi, is president of the Congress Party and widely acknowledged as the centre of real political power, something else that has weakened Mr Singh. Soaring inflation, particularly of food and basic commodities, had further undermined the government.

Even though there is little prospect of the government coalition falling apart at this stage, the main opposition, the Bharatiya Janata Party, smells blood. In an effort to broaden its national appeal, the party has recently asked a senior member, Jaswant Singh, to approach smaller, regional parties and sound them out about forming an opposition coalition.

Arun Jaitley, another senior BJP member, recently told The Independent he believed the government's entire programme had been damaged by the corruption allegations. "We are passing through one of those rare periods in history when the agenda [for the BJP] emerges by itself," he said. "I see a drift in governance. Corruption has paralysed the government. Manmohan Singh does not seem able to find a solution to the continued inflation. For the first time, I can see Congress leaders and all is not well with them."

The last parliamentary session was halted by opposition protests demanding a joint party investigation into the telecoms scandal. This month, the parliament is set to pass the budget and in recent days Mr Singh has hurriedly been negotiating details of such an inquiry in order to avoid another log-jam.

Some analysts have likened the crisis to the Bofors scandal of 1989 when the Congress government lost an election amid allegations that kick-backs from a Swedish arms company were taken by Rajiv Gandhi and his associates. Others say that while not everyone may understand the details of the spectrum auction scandal, there is a growing awareness within the country of the damaging impact of corruption.

Valerian Rodrigues, a political scientist at Jawaharlal Nehru University, said: "There is a broadening sensitivity that we need to have a return to the rule of law and political responsibility."