VALLETTA - Prime Minister Joseph Muscat defended on Monday his government's handling of the murder in 2017 of journalist Daphne Caruana Galizia and called for national unity after days of protests over a case that has stunned Malta.

Police on Saturday charged one of the small Mediterranean island's wealthiest businessmen, Yorgen Fenech, with complicity in the killing. He has denied the accusations and accused members of Muscat's inner circle of ordering the death.

Muscat announced on Sunday he would step down next month, giving his Labour party time to select a new leader.

Opposition lawmakers walked out of parliament on Monday in protest at the delayed departure, hurling bundles of fake cash at the government benches as they quit the chamber. Outside the building, hundreds of protesters chanted "Mafia, mafia."

Speaking to a semi-empty house, Muscat appeared relaxed, joking at times as he justified the investigation, which he said was Malta's biggest ever.

"The case showed that Malta's institutions work and everyone is equal before the law," he said.

Fenech has denied being the mastermind and sought legal immunity in return for revealing information about the murder plot and about alleged corruption involving Muscat's former chief of staff Keith Schembri and former Tourism Minister Konrad Mizzi, among others, court filings showed.

The government has rejected his bid for a pardon.

Schembri and Mizzi both resigned last week and have denied wrongdoing. Schembri was questioned for two days by police following his resignation before being released without charge.

Both men had been suing Caruana Galizia for libel over allegations she made about their business deals.

Court petition 

Critics are angry with Muscat for sticking by Schembri, and for including him in security briefings on the investigation even after Fenech was identified as a suspect in the murder and as an associate of Schembri.

"Muscat wants to manipulate the police investigation to save himself and his best friend Keith Schembri," opposition leader Adrian Delia told parliament.

"This is unacceptable for the opposition. We are walking out and will not participate in proceedings for as long as Joseph Muscat remains prime minister."

Caruana Galizia's family said Muscat should have no further involvement in the case and petitioned a court to ensure he was excluded from any further access to the information.

"It's completely intolerable and it's absolutely disgraceful that he's trying to hang on to power," Caruana Galizia's sister Corrine Vella told Reuters TV.

Muscat said he would handle only the "day-to-day" government administration until a new leader was chosen.

"We now need unity. Part of that is shouldering responsibility, not just for one's own actions but also ... for possible shortcomings," he said.

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