Planning Minister Romero Juca said in a hurried appearance before television cameras that he would step aside starting today. Although he did not resign, he was not expected to return, the Globo news site reported, quoting sources close to Temer.
The scandal threatened Temer just 11 days after taking power from Rousseff, who was suspended from the presidency on May 12 by the Senate for the start of an impeachment trial on charges of breaking government accounting rules.
Juca, who is Temer's right-hand man, had been due to help lead the team asking Congress to approve urgent - and potentially controversial - measures aimed at pulling Brazil out of recession.
The Folha newspaper released what it said were recordings of conversations in March between Juca and Sergio Machado, a former oil executive. The recordings were allegedly made secretly by Machado who, like Juca, is a target of a probe into massive embezzlement centered on state oil company Petrobras.
In the conversations, Juca is heard calling for a "national pact" that he appears to suggest would stop the probe, known as Operation Car Wash, in which dozens of top ranking politicians from a variety of parties, as well as business executives, have been charged or already convicted for involvement in the Petrobras scheme.
In comments immediately taken up by Rousseff supporters as evidence for her claim that the impeachment process is a coup in disguise, Juca says: "We need to change the government to stop this bleeding."
"I am talking to the generals, the military commanders. They are fine with this, they said they will guarantee it," he says.
He also says that he has been clearing his plans with justices on the Supreme Court, which oversees impeachment proceedings.
Temer came under pressure from opponents and Brazilian media outlets to fire Juca. However, Temer made no comment after brief discussions on the matter with allies at the Senate building.
"I am considering all this story to see whether he will stay or not at the ministry, but I am waiting for explanations from the minister," Temer was quoted as saying by the Estadao news site earlier.
Temer took over from Rousseff automatically on May 12 because he was vice president, but he suffers rock bottom approval ratings and faces major challenges to his authority and legitimacy as his center-right government seeks to roll back her leftist policies.
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