South Korea's reformist Prime minister-designate Kim Tae-ho said on Sunday he would step down as nominee amid opposition criticism of his qualifications and ethics.

South Korean President Lee Myung-bak named the 47-year-old former governor of a rural province as his choice as prime minister this month in a major mid-term reshuffle aimed at pushing through his pro-business reform agenda.

Lee replaced around half his cabinet at the time.

Some observers saw Kim as being groomed as a presidential candidate for the ruling Grand National Party (GNP) determined to retain power in the next election in 2012.

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.

The main opposition Democratic Party has called into question Kim's qualities as a leader, citing his failure to extricate himself from alleged involvement in a high-profile influence-peddling scandal, Yonhap news agency reported.

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

His choice as aimed at boosting the Lee administration's communication with local governments and the younger generation, the presidential office had said at the time of his nomination.

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 his business-friendly reform agenda 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.

The GNP had a strong showing in parliamentary by-elections in late July, giving fresh momentum for his legislative agenda as he begins the second half of his single five-year term.

(Reporting by Jeremy Laurence; Editing by Ron Popeski)