German President Christian Wulff leaves after making a statement of resignation in the presidential residence in Berlin, Feb. 17, 2012. [ Xinhua]

Embattled German President Christian Wulff on Friday resigned over scandals sparked by a private loan on favorable terms, causing Chancellor Angela Merkel new headaches as Germany struggles to take a leading role in fighting the prolonged eurozone debt crisis.

"I am ... today stepping down from the office of federal president to free up the way quickly for a successor," Wulff said in a televised statement.

"The developments of the past few days and weeks have shown that trust and thus my effectiveness have been seriously damaged," he said.

Wulff, 52, made the remarks just one day after prosecutors asked the German parliament to lift the president's immunity, which may lead to a formal investigation of possible corruption charges.

The president's resignation has put Merkel in an awkward position.

Merkel's coalition government, which has only thin majority and is currently concentrated on fighting the escalating euro crisis, now has to seek a consensus candidate with the opposition. A successor has to be elected by the parliament within 30 days.

Before a new president is elected, the head of Bundesrat, the upper house of the German parliament, will carry out the duty of the president.

Merkel postponed on Friday a planned trip to Rome and expressed "deep regret" over Wulff's resignation.

In a statement issued some 30 minutes after Wulff's address, Merkel thanked Wulff's contribution to the state and said she respected his decision.

A close ally of Merkel, Wulff was a deputy leader of Merkel's Christian Democratic Union (CDU) before he became president. He replaced Horst Koehler in mid-2010 after Koehler resigned over criticism on his remarks about the German military.

Wulff had faced mounting domestic pressure after it emerged that he had failed to disclose a private home loan of 500,000 euros (about 650,000 U.S. dollars) he received from the wife of a business friend at very low rates in 2008. Wulff was serving as state premier of the northern German state of Lower Saxony at the time.

Criticism simmered after the German most-read newspaper Bild reported that Wulff had tried to prevent it from publishing a report over the loan in December 2011.

Wulff has denied any misconduct which is deemed by Germans as having seriously violated the post of presidency standing for the nation's moral paragon, and tarnished the national image of the federal presidency, as well as the commitment to the freedom of press.

Wulff, whose post is largely ceremonial, had said he should have acknowledged the home loan sooner despite having nothing to hide because the matter was private, saying he regretted that his handling of the issue may have created the "wrong impression."