SEOUL (AFP) - South Korean President Park Geun Hye's nominee for prime minister withdrew his name Wednesday, following controversy over income which he amassed while practising law last year as a former Supreme Court justice.

The move is a fresh embarrassment for Park as she tries to reshuffle her government in response to intense criticism over its handling of last month's Sewol ferry disaster.

The president had hand-picked Ahn Dai Hee barely a week ago to replace Chung Hong Won, who was forced to resign as prime minister in the wake of the Sewol tragedy.

But Ahn's candidacy soon came under scrutiny amid suggestions that he had exploited his position as a former Supreme Court judge to earn 1.6 billion won (S$1.97 million) in just five months after opening a legal office last July.

Ahn, 58, said he was stepping down to avoid causing problems for Park's administration.

"It will be a burden to the government if I remain a nominee," he told reporters.

"I am sorry for causing concern to the president," he said, adding that he would return to the life "of an ordinary citizen".

His decision is a further setback for Park and her ruling Saenuri Party, which fears a voter backlash over the ferry disaster at nationwide local elections on June 4.