VIENNA (Reuters) - Austria's government has curbed the remit of a parliamentary investigation into high-level corruption and ensured Chancellor Werner Faymann is not called to testify, rebuffing pressure by protesters and prompting an opposition outcry.
The panel's work has enthralled Austrians for months and fuelled perceptions that politics are rotten given the cozy interplay of business and political power in the Alpine republic, one of the most affluent states in the European Union. Criminal inquiries continue into a slew of alleged graft cases.
With hundreds of demonstrators gathered outside parliament to demand the panel's work go on, a deal to rescue the inquiry came together late on Wednesday but limited its work to just eight more hearings and left Faymann off the witness list.
Critics called it a sad day for Austrian democracy when government parties - concerned the panel was making life uncomfortable before elections next year - fettered an investigation designed to shed light on shady dealings.
"Even if a panel with a deadline is better than no panel, informed elucidation of corruption is no longer possible," the centrist daily Der Standard commented on Thursday.
Officials from Faymann's Social Democrats and their center-right People's Party (OVP) coalition partners put the best face on the compromise deal, noting the panel would have come to an abrupt halt in the absence of an accord.
But Stefan Petzner of the opposition right-wing Alliance for Austria's Future summed it up by telling Austrian television: "In truth this was ice-cold blackmail by the governing parties."
Faymann and a top aide have been investigated over whether they pressured the state railways and motorway agency to place flattering ads with friendly newspapers during his tenure as transport minister before he became chancellor in 2008.
Faymann has repeatedly denied any wrongdoing and said he was ready to appear before the panel if asked to testify, something that the governing parties can prevent with their majority.
The investigative panel has grilled officials, lobbyists and business executives about suspected dirty deals.
It has chased up payoffs and perks financed by Telekom Austria, an ex-monopoly still partially state-owned; looked into whether kickbacks flowed in the 2004 privatization of public housing; and examined the award of emergency service radio network contracts, among other cases.
Its work helped prompt parliament to adopt a sweeping ethics package in June that sheds more light on politicians' finances, hoping to draw a line under the scandals.
The panel is now set to wrap up its work by October 16. It still intends to look into state advertising practices, Telekom deals in eastern Europe, and whether wealthy foreigners were able in effect to buy Austrian citizenship.
(Reporting by Michael Shields; Editing by Mark Heinrich)