SEOUL (Reuters) - South Korean prosecutors said on Sunday that they believed President Park Geun-hye was an accomplice in a corruption scandal that has rocked her administration, in a heavy blow to her fight for political survival.
The prosecutors' comments, which came as they indicted a close friend of Park's and two of her former aides, are likely to spur stronger calls for her to step down or be impeached.
Park's close friend Choi Soon-sil and former presidential aide An Chong-bum were charged with abuse of power by pressuring companies to contribute funds to foundations at the center of the scandal, said Lee Young-ryeol, head of the Seoul Central District Prosecutors' Office.
"The special investigation team concluded that based on the evidence secured to date, the president was in complicity with Choi Soon-sil, An Chong-bum and Jeong Ho-seong to a considerable degree," Lee told a news conference.
Jeong, also one of Park's former aides, was indicted for leaking classified information to Choi.
Park's lawyer Yoo Yeong-ha rejected the assertion that she was involved, calling it an "imagination" and saying prosecutors "have built a house of fantasy."
Presidential Blue House spokesman Jung Youn-kuk said the prosecutors' announcement was "deeply regrettable."
"The special investigation team made a claim as if the president has committed a grave crime when it announced the result of its investigation," Jung said.
"The announcement is not truth at all and but a house of cards built on repeated imagination and speculation that completely ignores objective evidence."
Park cannot be indicted because she has constitutional immunity, prosecutor Lee said, but added: "We will continue to investigate the president," without elaborating.
Under the constitution, a sitting president cannot be indicted unless on charges of treason, but the conclusion by the prosecutors that Park was involved in the case prompted fresh calls from opposition parties for her to step down.
The main opposition Democratic Party and the centrist People's Party said Park will face impeachment proceedings if she refuses to resign. But they stopped short of saying they would immediately initiate such a move.
Analysts said the prosecutors' comments about Park's role increased the prospect that she would face impeachment.
"It provided a legal basis for impeachment proceedings, not only her moral and political liabilities," said Kim Jun-seok, a political science professor at Dongguk University in Seoul.
Park is unlikely to voluntarily step down because she would lose immunity against prosecution, Kim said. Her five-year term ends in February 2018.
"Then, the only option that is left for politicians given the worsening public sentiment is impeachment," he said.
Park has resisted calls to resign over the scandal but has publicly apologized twice, saying that it was caused by her shortcomings and that she had sought help from the business community in the belief it would benefit the economy, not for personal gain.
The indictments had been expected. Choi has been accused of conspiring with An to exert improper pressure on dozens of the country's biggest conglomerates to help raise 77.4 billion won ($65.59 million) on behalf of two non-profit foundations she controlled, according to the prosecutors.
Park has been rocked by allegations that Choi used her ties to the president to meddle in state affairs and wield improper influence. Her aides An and Jeong both stepped down late last month as the crisis deepened.
Hundreds of thousands of people took to the streets of Seoul on Saturday in the fourth straight weekend of protests against Park, in the biggest public demonstrations the country has seen since the 1980s.
Park has pledged to cooperate in the investigation but pushed back on the prosecutors' plan to question her last week.
South Korea's parliament has approved a bill to appoint a special prosecutor, who will take over from state prosecutors and conduct a separate and a more wide reaching probe. The special prosecutor is expected to begin work next month.
Additional reporting by Yun Hwan Chae; Editing by Jack Kim and Kim Coghill