Maltese Prime Minister Joseph Muscat, engulfed in crisis over the probe into a murdered journalist, has announced he plans to step down, saying on state television he will ask his ruling Labour Party to start a process to choose a new leader in January.

Calls for Muscat to quit intensified after the investigation into the 2017 car bomb killing of anti-corruption journalist Daphne Caruana Galizia led to charges on Saturday against a prominent businessman with alleged ties to government ministers and senior officials.

In a televised address on Sunday evening, Mr Muscat said he was not leaving immediately, rather announcing a process to replace him that will start on January 12.

This drew immediate criticism from some opponents who said he should go right away.

“I will write to the president of the Labour Party so that the process for a new leader is set for 12th January 2020. On that day I will resign as leader of the Labour Party. In the days after I will resign as prime minister,” Mr Muscat said.

“Our country thus will start a short process of approximately a month for the Labour Party to choose a new leader and a new prime minister.”

Thousands of people took part earlier on Sunday in an anti-government march in Valetta, the capital of the tiny Mediterranean archipelago, in an event organised, among others, by activist group Repubblika, and led by members of the Caruana Galizia family.

In his address, the prime minister struck a defiant tone, saying that every day since the murder he had shouldered responsibilities in “the interests of the conclusion of the case”.

He added, however, “some decisions were good while others could have been better made”.

The crisis over the Caruana Galizia murder probe grew after businessman Yorgen Fenech, 38, was taken to a Valletta court late on Saturday and charged with complicity in the murder.

He pleaded not guilty to that and other charges.

Mr Fenech was charged after the government turned down his request for immunity in return for information about the murder plot and about alleged corruption involving Mr Muscat’s former chief of staff Keith Schembri and former tourism minister Konrad Mizzi, among others, court filings showed.

Mr Schembri and Mr Mizzi resigned on Tuesday and Mr Schembri was interrogated for two days by police before being released without charge.

Mr Schembri has denied any wrongdoing. Mr Mizzi on Tuesday denied any business links with Mr Fenech and any wrongdoing.

Opposition leader Adrian Delia, in a tweet, said the country could not wait another single day for Muscat to go.

The @PNmalta will not participate in any activities or events where @JosephMuscat_JM is present. Justice cannot be served with an illegitimate Prime Minister at the helm.

— Adrian Delia (@adriandeliapn) December 1, 2019

“Every day he stays in office means another day where justice is not done and not seen to be done. The prime minister has lost his legitimacy,” he said.

-AAP