NEW DELHI: India's main opposition party ordered the chief minister of a southern state to quit Thursday following allegations he was involved in a mining fraud which cost the public dollars 3.6 billion.

The opposition Bharatiya Janata Party's (BJP) spokesman told reporters in the capital New Delhi the party told B.S. Yeddyurappa, head of the BJP government in the resource-rich state of Karnataka to resign immediately.

“The BJP Parliamentary Board unanimously decided there has to be a change in the leadership of the BJP legislature party in the state of Karnataka,” BJP spokesperson Ravishankar Prasad said.

“Accordingly, it has advised Yeddyurappa, the present chief minister, to tender his resignation immediately,” he said.

Yeddyurappa was named Wednesday in a report published by the southern state's ombudsman who was investigating corrupt mining practices.

Judge Santosh Hegde accused the chief minister of enabling illicit mining of iron ore in Karnataka, which cost the exchequer 160.8 billion rupees (dollar 3.6 billion) between 2006 and 2010.

He said he recommended “the prosecution of state chief minister B.S. Yeddyurappa as a public servant” under the Prevention of Corruption Act for his “direct involvement” in the scam.

The mining graft is the latest in a slew of corruption scandals in India, which is still reeling from the allegedly fraudulent sale of telecom licences in 2008 estimated to have cost the country up to dollar 40 billion.

The ombudsman's explosive findings have cast a shadow on the BJP, which has been leading an anti-graft campaign nationally against the Congress-led government of Premier Manmohan Singh.

Hegde said his probe uncovered “involvement of some 100 mining companies, about 600 officials, powerful politicians including the chief minister”.

The report said the federal and state government exchequers lost money due in the form of royalties, central excise duties, value-added taxes and other levies.

The report also said Yeddyurappa's family, including one who is a BJP member of the national parliament, benefited from the fraud.

The BJP spokesman said two senior party leaders would head to Karnataka's capital Bangalore to supervise the election of Yeddyurappa's successor.

Yeddyurappa, who also faces allegations of selling government land at below market cost to family members, took office in 2008 when he led the BJP to a first-time win in the southern state.