By Jack Kim
SEOUL, May 28 (Reuters) - South Korean President Park Geun-hye suffered another political setback on Wednesday when her choice for prime minister withdrew his name amid questions about the ethics of earning a large income after leaving public service.
Park had nominated Ahn Dai-hee to replace the incumbent who resigned over the government's slow and ineffective response to last month's ferry disaster that killed more than 300 people.
Park's office said last week Ahn, a former Supreme Court justice and before that a prosecutor known for fighting corruption, was the ideal person to lead reform of government.
Ahn was expected to enforce bureaucratic ethics including ending a culture of officials leaving senior government jobs to go into the private sector which can blur the lines between businesses and those regulating them.
"Today I withdraw myself as a candidate for prime minister," Ahn said in a hastily arranged press briefing. "I apologise to the president who trusted me and named me as a prime minister candidate for causing concern."
Ahn has come under criticism after reports surfaced that he had earned 1.6 billion won ($1.6 million) since entering private practice last year and that it was largely because of the senior positions he held in the judiciary and prosecution.
Ahn has denied he used his government experience to benefit in public practice and offered to donate most of the money to charity.
Park vowed last week to overhaul government structures and improve safety oversight to guard against any recurrence of preventable disaster. She announced the breakup of the coast guard for failing in its duties in rescue efforts in the Sewol ferry tragedy of April 16.
Park has suffered a sharp drop in public support since the disaster and has apologised formally amid angry national outrage over the government's response to the country's worst civilian maritime disaster in 20 years.
She is in the second year of a single five-year term. Her conservative Saenuri Party is facing a tough fight in the June 4 vote to elect local government officials, including the key posts of Seoul mayor and Gyeonggi province governor.
The coast guard is still struggling to recover 16 missing bodies from the Sewol. The ship's captain and three other officers have been indicted on charges of homicide.
Authorities are seeking the arrest of the head of the family that owns the operator of the ferry, offering a reward of half a million dollars for information leading to his capture.
Yoo Byung-un is wanted on charges of embezzlement, negligence and tax evasion.($1 = 1,023 won) (Additional reporting by Ju-min Park; Editing by Nick Macfie)