Economy Minister Matjaž Han has been elected new leader of the Social Democrats (SD) to succeed Foreign Minister Tanja Fajon, who stepped aside amid the turmoil over a scandal surrounding the purchase of a run-down Ljubljana building meant to house several court departments.

Han, 53, narrowly beat MEP Milan Brglez, 56, by 182 votes to 172 at a party congress late on 13 April after the pair made it to the second round of voting on what were initially four candidates for the top job.

Han, who served as MP for almost two decades prior to his stint as minister, is seen as a representative of the party's pro-business wing that has been criticised by many of late as having forgotten social democratic ideals in favour of political pragmatism.

Brglez, a former president of the National Assembly, who joined the SD in 2018 after falling out with his then party boss and Prime Minister Miro Cerar over migration policy, promised a return to old-style social democratic ideals in his address to the congress.

Economy Minister Matjaž Han (left) and MEP Milan Brglez (right) after they made it to the run-off for SocDem leader. Photo: Daniel Novakovič/STA

Han joined the race just a day before the congress, which earned him criticism from the congress delegates, but he brushed that aside saying: "I didn't know I was the main problem, I thought the [party's] two million euro debt was."

In his speech to the congress, he said the party had to remain what it had always been, "a guardian of democracy, human rights and honesty."

He argued the SD must play a more important role in government and sees it as one of his advantages that he can "talk to everyone," a reference to speculations in the run-up to the congress that his election would mean the party would be open to a coalition with the right-wing Democrats (SD).

However, he added that he "absolutely sees the SD in centre-left governments".

In his acceptance speech Han said he was "truly ready" to push the party forward. He said he heard all the critical voices but now was the time to unite the party, something he said Brglez acknowledged as well.

"Without us continuing together as I wish, social democracy will have no future ... I will try my best that we will truly work together as friends and comrades."

Tanja Fajon (right) succeeded by Matjaž Han (left) as at leader of the Social Democrats. Photo: Daniel Novakovič/STA

The party held the unscheduled congress after it tanked in the rankings following the scandal involving the purchase of the ill-fated court building that exposed potential corruption of several senior party members.

The scandal led to the resignation of Dominika Švarc Pipan, the justice minister, and Tanja Fajon's decision not to vie for the party presidency again. Fajon endorsed Han at the outset of the congress.

The party elected not just the president but the entire leadership. The four new vice-presidents are MEP Matjaž Nemec, MP Meira Hot, Justice Minister Andreja Katič and the president of the youth wing. Luka Goršek.

The powerful post of the secretary general was entrusted to Živa Živkovič, who has spent the last ten years as party and deputy group aide.

She succeeds Klemen Žibert, who resigned due to the court building scandal, having been singled out by the former justice minister as the man who masterminded the botched purchase.