South Korea's reformist prime minister-designate and two other ministerial nominees stepped down on Sunday amid allegations of corruption, stymieing President Lee Myung-bak's plans to boost ruling party morale.

Lee had picked Kim Tae-ho as prime minister earlier this month, but after a heated confirmation hearing last week in which the opposition called into question his qualifications and ethics, Kim gave up his quest for the post.

I have resigned as the prime ministerial nominee with the thought that I should not cause any more trouble to the president's governance, Kim told a media conference in Seoul.

During the confirmation process I sincerely acknowledged my many shortcomings. Although I feel some of the allegations were a bit unfair, I accept them as they were caused by my insufficiencies.

Two other cabinet nominees, for the posts of knowledge economy and culture, also quit over corruption allegations on Sunday.

Kim, 47, had been in line to become the youngest prime minister in decades, and observers saw his selection as a sign he was also being groomed as a presidential candidate for the ruling Grand National party at the next election in 2012.

Prime ministers in South Korea traditionally take on a more bureaucratic and administrative role. Cabinet reshuffles occur frequently and often involve the prime minister.

Lee ditched half of his cabinet mid-way through his five-year term because he wanted to give his government a more youthful and vigorous look as he pushes ahead with reforms.

Kim had been earmarked to replace the previous prime minister, Chung Un-chan, who quit last month to take responsibility for the government's failure to win parliamentary approval for a key development project.

Lee's plans for job creation and reform have been blocked for months in parliament due to a row over plans to move some ministries to a new administrative capital.

A vote in June marked the end of the plan by rejecting Lee's initiative, and led to Chung's resignation.

Lee's Grand National Party had a strong showing in parliamentary by-elections in late July, giving fresh momentum to his legislative agenda as he begins the second half of his single five-year term.

(Reporting by Jeremy Laurence; Editing by Nick Macfie)

South Korea