Setnikar Cankar denied any wrongdoing in making EUR 636,000 on the side over eleven years at the faculty, a figure revealed yesterday when an anti-corruption watchdog unveiled an upgrade of an online application that traces the flow of public funds.

The payments were for teaching and research work for the faculty, which cannot constitute a conflict of interest. "There are appropriate records that form the basis for the payments," she said.

She is convinced any investigation would clear her name but acknowledged that "political consequences cannot be avoided," as the scandal would "probably be exploited" and hamper her work as minister.

Agreeing with such an assessment, Cerar accepted Setnikar Cankar's resignation, but would not offer any name as to her successor yet, although he did say there were "quite a few options"

"The minister is convinced she did nothing illegal or unethical. I cannot assess that yet at that point as I'm not acquainted with all the circumstances and details yet," the PM said.

But Cerar also said her earnings were "quite high for Slovenian standards, which is obviously a cause of considerable attention. It also draws attention that she got these amounts from the faculty she was employed with and headed."

Even though the Miro Cerar government has been in office less than six months, Setnikar Cankar is the second minister to resign. A cabinet member in the quota of Cerar's SMC party though not a party member, Setnikar Cankar was hopeful Cerar would find a new candidate soon.

Cerar needs to formally notify parliament of the minister's resignation with seven days. Once the parliament takes note of the resignation the PM has ten days to put forward a new candidate or appoint a cabinet member as a stand-in.

The minister was expected to step down given the mounting public pressure following revelations that private individuals made more than EUR 1bn with freelance contracts signed by state institutions in the past eleven years.

The revelations promoted calls for a crackdown on a system that has allowed her and many others, a lot of them university professors, to make hundreds of thousands of euros in freelance contracts with the public sector on the side.

The coalition called for a review of the system but senior officials warned that the minister should not just serve as a scapegoat. "There is a systemic flaw in the public education system that needs to be addressed," SocDem leader Dejan Židan said.

While universities have rushed to defend the practice due to the nature of their work, trade unions representing teachers are up in arms over what they see as old elites shielding their privileges.

There appears to be "a caste controlling the flow of money, largely public funds, at individual faculties and channelling it into their own pockets," said Branimir Štrukelj, the head of the SVIZ union of teachers and scientists.

The Higher Education Union said the revelation highlighted that "masses of capable young scientists are without jobs because of 'austerity'" while deans have full-time jobs, research projects and "teach at nine additional locations".

The Commission for the Prevention of Corruption announced a comprehensive investigation into possible irregularities in the freelance contracts.