Updated

Two European Parliament lawmakers have resigned and a third has stepped down from his position in his party after a British newspaper reported they had agreed to propose legislation in return for bribes.

The Sunday Times reported this weekend that former Austrian interior minister Ernst Strasser, former Slovenian foreign minister Zoran Thaler and former Romanian deputy prime minister Adrian Severin agreed to put forward amendments in the European Parliament in exchange for money. The report was the outcome of an eight-month investigation in which undercover Sunday Times reporters posed as lobbyists, the paper said.

The story has caused a stir in Brussels and claimed its first casualty on Sunday when Strasser resigned after Austrian Finance Minister Josef Proell, who heads the Austrian People's Party, issued a harsh statement demanding he do so.

In comments to Austrian radio Oe1, Strasser disputed the allegations against him, saying he did everything to try to blow the phony firm's cover and that he had planned to provide police with evidence.

Slovenia's Thaler soon followed suit, telling reporters Monday he was resigning so that an investigation into "all facts and circumstance of this attempt at discreditation could proceed without any pressure."

"I did not cross the line of legality," Thaler said. "I did not accept the money."

Thaler insisted that he wanted the probe to get to the bottom of the affair and added that he had already appeared before Slovenia's independent anti-corruption commission.

In Romania, meanwhile, Severin resigned his position as deputy chairman of the opposition Social Democracy Party until the situation was cleared up. He also was summoned to Brussels by the head of the Group of the Party of European Socialists to explain himself.

Severin was defiant at a news conference in Bucharest Monday, saying he was targeted because he was "an influential Romanian" and the European Parliament did not need "influential Romanians" in the legislature. He denied doing anything illegal, or being corrupt.

Severin entered politics during the 1989 anti-communist revolt and was Romania's foreign minister from 1996 to 1997. He was forced to resign after he claimed that unidentified leading Romanian editors were employed by Romania's secret services.

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Alison Mutler in Bucharest, Romania, and Ali Zerdin in Ljubljana, Slovenia, contributed to this report.