UPDATE 2-Malta's ruling party lawmakers back embattled prime minister

Lawmakers from Malta's ruling Labour Party stood by Prime Minister Joseph Muscat on Sunday but did not indicate what he may do next as he faces pressure to quit amid a crisis sparked by the investigation into a murdered journalist. The party's parliamentary group met for four hours, saying afterward that lawmakers gave "unanimous support to all decisions which the Prime Minister will be taking".

Calls for Muscat to step down grew after the probe into the 2017 car bomb killing of anti-corruption journalist Daphne Caruana Galizia led to charges on Saturday against a prominent businessman with alleged ties to ministers and senior officials. Yorgen Fenech, 38, was taken to a Valletta court late on Saturday and charged with complicity in the murder. He pleaded not guilty to that and other charges.

The prime minister was thought to be preparing to announce his departure but seeking to stay in office until a successor is chosen, according to local media and government officials close to Muscat. Those same sources said he is likely to stay on until the party holds a leadership election in mid-January. Thousands of people took part in an anti-government march on Sunday in Valetta, the capital of the tiny Mediterranean archipelago, marching from the Parliament to the central courthouse in an event organized, among others, by activist group Repubblika, and led by members of the Caruana Galizia family.

Fenech was charged after the government turned down his request for immunity from prosecution in return for revealing information about the murder plot and about alleged corruption involving Muscat's former chief of staff Keith Schembri and former Tourism Minister Konrad Mizzi, among others, court filings showed. Schembri and Mizzi resigned on Tuesday and Schembri were interrogated for two days by police before being released without charge. Schembri has denied any wrongdoing. Mizzi on Tuesday denied any business links with Fenech and any wrongdoing.

"This is just the beginning. Joseph Muscat is still put, still protecting his best friend Keith Schembri. Because by protecting Schembri, Muscat is protecting himself," activist group Repubblika said in a statement. As shouts of "Mafia!" echoed across the square during the protest, Michael Vella, Caruana Galizia's father, said justice was a long way off.

Muscat's cabinet should all be in court and by not standing up to corruption before his daughter was killed, "they all have blood on their hands," he told Reuters. The protest ended with Malta's national anthem as the crowd held aloft their mobile phones, with their lights illuminated to act as candles, and some watching policemen stood to attention.

Critics are angry with Muscat for sticking by Schembri, an old friend since school, and including Schembri in security briefings on the murder investigation even after Fenech was identified both as a suspect in the murder and an associate of Schembri.

CARDONA RETURNS

The Labour Party statement after its meeting on Sunday also said Chris Cardona, the economy minister who suspended himself from his duties on Tuesday after having been mentioned by a suspect in the investigation, has now been reinstated in his position. Cardona has denied any involvement in the plot and has denied any corruption or wrongdoing. Caruana Galizia had reported that Schembri and Mizzi had set up secret companies in Panama. She also reported how another company, called 17 Black, was meant to be a vehicle to deposit funds into those companies. Following her murder, an investigation by Reuters and Times of Malta showed Fenech as having been the owner of 17 Black.

Mizzi has denied any business ties to Fenech or knowledge of 17 Black or any criminal activity. Schembri has always denied any wrongdoing. Speaking on Saturday for the first time since his arrest, he denied being the author of a type-written letter that Fenech told police he secretly received after his arrest. Fenech said the letter told him to pin the blame for the murder on another government minister.

"I immediately denied that the letter came from me when the police were interrogating me and I stand by that completely," Schembri told the Times of Malta.