An Indian regional minister resigned on Tuesday following claims of a huge scam linked to irrigation projects, in the latest alleged graft scandal to hit Indian politics.

Ajit Pawar stepped down from his post as deputy chief minister of western Maharashtra state, after he was accused of irregularities in approving projects during his decade-long tenure as the state's water resources minister.

"If I had not resigned people would have got the impression that I'm power hungry," Pawar told reporters in Mumbai, the capital of Maharashtra, adding that he was prepared for a CBI probe.

Media reports earlier said Pawar, who is in the Nationalist Congress Party (NCP), had cleared projects worth $3.7 billion in 2009 without the necessary clearance of a local irrigation body.

There are also allegations that tenders were approved at inflated rates, but Pawar has denied the charges, according to the Press Trust of India news agency.

Threatening a crisis in state politics, 20 NCP members of government offered to resign after Pawar quit, suspecting their coalition partners of stoking the allegations against them, the PTI said.

The state government is working on a "white paper" on spending after allegations that Maharashtra's irrigation capacity grew only 0.1 percent between 2000 and 2010 despite $13.1 billion being spent on such projects.

Corruption has been a major political issue in India over the last two years, with various scandals rocking the central government, including a recent furore over the alleged misallocation of coal mining rights.

In Maharashtra, one of India's richest states, the former chief minister was forced to resign in 2010 and was charged this year over his alleged role in a housing scam involving apartments meant for war widows in Mumbai.