The top political leader of a key southern Indian state ruled by the country’s main opposition party has resigned after an anti-corruption panel indicted him in a $3.6 billion illegal mining scam.

B.S. Yeddyurappa, a popular leader of the Hindu nationalist Bharatiya Janata Party, stepped down Sunday after he lost the support of party leaders. The BJP leads the government of Karnataka state, whose capital, Bangalore, is India’s technology hub.

Karnataka’s ombudsman published a report Wednesday accusing Yeddyurappa and 787 other officials in a web of corruption involving illegal iron ore contracts that cost the state $3.6 billion in lost revenues from 2006 to 2010. Yeddyurappa has denied profiting from illegal mining.

The BJP has been a critic of India’s ruling Congress Party for recent corruption scandals. Congress has responded to the criticism by accusing the Hindu nationalists of hypocrisy.

Iron ore mining in Karnataka has surged in recent years and India is a major world supplier. The state has long struggled with illegal mining.

The BJP had resisted calls for Yeddyurappa’s resignation, in part because Karnataka is the only southern Indian state where it controls the government.

Draft legislation aimed at creating a new national ombudsman’s office to investigate corruption allegations against government ministers and lawmakers is set to be debated in parliament this week.

A group of activists who used a hunger strike in April to push for the creation of such a position have dismissed the proposed legislation as “toothless” , and vowed to resume their protests.