Demonstrators in Hungary are calling for the resignation of Prime Minister Peter Medgyessy who has admitted he served as a counter-intelligence officer for the former Communist secret service.
Mr. Medgyessy admitted he had worked for the Communist secret service as a counter-intelligence officer between 1977 and 1982, confirming a report in the newspaper Magyar Nemzet earlier this week.
But Mr. Medgyessy told a meeting of his Socialist Party and its coalition partner, the Alliance of Free Democrats, that during that period he had tried to work for Hungary's financial interests by preventing foreign spies, including the Russian KGB, from stopping Hungary's integration into the Western world.
Mr. Medgyessy also said he tried to edge Hungary away from the Soviet Union by secretly preparing the country to join the International Monetary Fund in 1982.
And he strongly denied reports he also monitored anti-government activity in Hungary's finance ministry and at two state financial institutions in the late 1970s.
Mr. Medgyessy said he sees no reason to resign, and he said he wants to serve his entire four-year term.
Prime Minister Medgyessy said Hungary "deserves more quietness and prosperity." He said his cabinet wants to provide "stability and the rule of law to the country."
Mr. Medgyessy announced his decision to stay on as prime minister after talks between his Socialist Party and the Alliance of Free Democrats.
Many Free Democrats are former dissidents, and some were tortured by secret police agents and even sentenced to death before receiving an amnesty for their role in the 1956 anti-Soviet uprising. But the Free Democrats leader, Gabor Kuncze, said it is common knowledge that former secret service staff members are still working in public life and that it is time to look towards the future.
However opposition supporters have called for a week of demonstrations in front of the parliament building in Budapest.
One demonstrator, 27-year-old Kristian who did not give his last name, says he believes it is a mistake of Mr. Medgyessy not to resign. "He was in the leadership of the Communist party in the past. And he was in the secret police. And that's why I think he has to leave, because it is not a democratic thing, his past," he said.
Some other demonstrators, including 34-year-old Imre Kocsis, have started a seven-day hunger strike. Mr. Kocsis, leader of the "Conscience '88" activist group, said the Communists have returned to the streets of Budapest, and he called for a recount of the votes in April's parliamentary elections.
Mr. Kocsis said there was fraud and cheating during Hungary's parliamentary elections. But he said responsible officials refused to investigate the hundreds of complaints.
Some analysts said the political turmoil could undermine foreign investments in Hungary. They also said the dispute could taint Mr. Medgyessy's administration and damage negotiations about the country's possible entry into the European Union in 2004.