South Korea's president suffered a political blow after his choice for the post of prime minister withdrew over questions about his personal financial dealings.

Kim Tae-ho, 47, the former governor of South Gyeongsang province, was set to win the National Assembly's approval as South Korea's new prime minister.

Kim, appointed by President Lee Myung-bak, would have been the first prime minister in his 40s since 45-year-old Kim Jong-pil was appointed in 1971. Only four prime ministers have been appointed while still in their 40s.

But a series of embarrassing financial questions during his confirmation hearing forced Kim to have a news conference and announce his withdrawal from the appointment.

"I deeply regret having caused trouble to the public with my own problems," Kim said in a nationally televised news conference.

"I decided to give up the nomination for the post of prime minister in order not to be an obstacle to the president carrying out of state affairs," he said.

His announcement, made at times with his head deeply bowed, was followed a few hours later by two other political appointees withdrawing.

Shin Jae-min was headed for the Ministry of Culture and Lee Jae-hoon was to lead the Knowledge Economy Ministry.

"The president decided to accept their withdrawals, which appear to have reflected public opinion," Yim Tae-hee, the president's chief of staff, said.

"(The president's decision to accept the withdrawals) also considered some opinions that the latest reshuffle may have failed to live up to the public's expectations," Yim said.

Kim was accused of under-reporting his income during his governorship of Gyeongsang province and that he illegally took bank loans to finance political campaigns.

His wife was also criticized for sending provincial government employees on her personal errands and for taking government vehicles for her private use.

Kim was also questioned over his links to jailed businessman Park Yeon-cha. Kim said he met Yeon only after 2007 but later admitted that he had played golf with him in 2006.

Park, 64, is a former chief executive officer of international shoe-making business Taekwang He was arrested in December 2008 on charges of tax evasion and alleged insider trading and was sentenced in October 2009 to 3 years, 6 months in prison.

Park was suspected of giving Kim kickbacks but the allegations were never proved.

Kim's appointment earlier this month was controversial, at first, because of his age. But his reform tendencies were seen as giving a boost to the public image of Lee's administration.

When appointed, Kim showed humility in public. "I understand that this country is a land of opportunity as I, with no special background and from the rural ordinary family, can get such an opportunity," Kim said at a news conference after the announcement of his appointment.

Kim was meant to replace Prime Minister Chung Un-chan who was appointed in September 2009.

Chung stepped down July 29 over the failure to push through the National Assembly a plan to move government agencies into Sejong City, around 90 miles south of Seoul.

Constitutionally, Lee can't stand again for president and he was believed to be grooming Kim to eventually lead the ruling Grand National party.

Lee will now be looking elsewhere for a prime minister for the second half of his 5-year term that ends in 2013.

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US slaps new sanctions on North Korea: Treasury
The US government on Monday slapped sanctions on four people and eight firms linked to North Korea's government, the Treasury Department said.

The individuals, including two members of the North Korea's General Bureau of Atomic Energy were sanctioned under rules against providing financial and other support to the nuclear power.

They will face a travel ban and assets freeze.

Among those targeted were the head of the atomic energy bureau Ri Je-son and Ri Hong-Sop, who according to the United Nations, once ran the controversial Yongbyon Nuclear Research Center.

The center is suspected of producing fissile materiel used in nuclear weapons testing.

UN resolutions adopted after the North's missile and nuclear tests last year ban transactions linked to its nuclear and atomic activities and the supply of luxury goods to Pyongyang.

The fresh sanctions come amid tensions between Washington and Pyongyang, which have heightened since the March sinking of South Korean navy ship the Cheonan that resulted in 46 deaths.

The United States blames North Korea for the attack. Pyongyang denies torpedoing the ship.