The treasurer of Brazil’s ruling Workers’ Party, Joao Vaccari, has stepped down, after being arrested over corruption at oil giant Petrobras.
Mr Vaccari is charged over an alleged scheme in which the party received dirty money from inflated deals between oil executives and construction firms.
Party president Rui Falcao said he still had confidence in Mr Vaccari.
He is the closest ally of President Dilma Rousseff to have been arrested in the broadening scandal.
The arrest places further pressure on the president, who has faced street protests, impeachment calls and plummeting opinion ratings since her re-election four months ago.
Ms Rousseff served as the head of Petrobras for much of the period when the corruption took place, but she has not been implicated in the scandal.
More than 40 politicians, including the heads of both houses of congress, are being investigated over the affair.
Prosecutors say Mr Vaccari served as the Workers’ Party’s liaison in a scheme where oil officials colluded with construction firms to artificially inflate billions of dollars worth of contracts.
According to oil officials who are testifying for the prosecution, some of the cash skimmed from the deals was diverted to the party and its allies.
The party says it remains sure of Mr Vaccari’s innocence, “not only because of his conduct, but because in a democratic state everyone has the fundamental right to be considered innocent until proven guilty”.
Mr Vaccari was charged last month, becoming one of the most powerful political figures to have been named in the scandal.
His arrest was reportedly ordered because of concerns that he may influence the investigation or flee the country.
“Anyone responsible for such severe crimes, including using the position of treasurer of a political party to raise criminal funds and corrupt the political system, is a risk to public order,” a judge handling the case, Sergio Moro, said in a court order.
Police arrested the treasurer in Sao Paulo as he was going for a morning walk.
Prosecutors say they have “ample proof” that Joao Vaccari, acting as the Workers’ Party treasurer, asked for donations from former Petrobras services division chief Renato Duque and executives at companies who won Petrobras contracts.
During the wide-ranging investigation into Petrobras, dozens of executives from six of Brazil’s largest engineering companies and two former Petrobras managers have been indicted for money laundering, bribery and of funnelling money from the company to politicians.
Prosecutors have asked the Supreme Court to investigate dozens of legislators including the speakers of both houses of Congress for allegedly receiving the bribes.
President Rousseff’s opponents have argued that she must have known about the bribery scheme because she served as chair on Petrobras’s board at a time when it was taking place.
The scandal has meant Petrobras, one of the largest oil businesses in the world, has lost much of its market value since September.