By Hyunsu Yim and Ju-min Park
SEOUL (Reuters) -South Korean President Yoon Suk Yeol is still commander in chief and there is no disruption to the U.S. alliance, the defence ministry said on Monday after it was revealed Yoon was under criminal investigation for declaring martial law last week.
Yoon's grip on power has come into question with dissent growing among senior military officers against the president, and his own party saying it would establish a task force to handle his eventual resignation.
While Yoon survived an impeachment vote in parliament on Saturday, his party's decision to delegate presidential authority to the prime minister has plunged the key U.S. ally into a constitutional crisis.
Yoon has refused calls, including some from within his own ruling party, to resign, but his future looked more uncertain over the weekend when Yonhap news agency reported he was under criminal investigation for alleged treason.
Police were also considering banning him from leaving the country, Yonhap and other media reported on Monday.
Prosecutors on Sunday arrested ex-Defence Minister Kim Yong-hyun over his alleged role in the declaration of martial law, Yonhap reported.
Yoon gave the military sweeping emergency powers on Dec. 3 to root out what he called "anti-state forces" and obstructionist political opponents. He rescinded the order six hours later, after parliament defied military and police cordons to vote unanimously against the decree.
Amid the backlash, multiple military officials, including the acting defence minister, have said they would not follow any new order to impose martial law again.
The main opposition Democratic Party has called for Yoon to be stripped of authority to control the military. The DP has also demanded the arrest of Yoon and any military officials implicated in the martial law fiasco.
Yoon's People Power Party (PPP) had established a task force to deal with, among other matters, "political stabilisation after martial law and (Yoon's) orderly early resignation", a spokesperson said on Monday.
On Sunday, PPP leader Han Dong-hoon said the president would be excluded from foreign and other state affairs, and Prime Minister Han Duck-soo would manage government affairs until Yoon eventually stepped aside.
That proposal has drawn criticism from the opposition, which says it is unconstitutional. It says Yoon must be impeached or resign and face legal prosecution, and plans to table another impeachment bill on Saturday.
Opposition leader Lee Jae-myung warned on Monday that the political crisis threatened to do irreversible harm to Asia's fourth-largest economy, major global supplier of memory chips.
South Korea's finance ministry and regulators said they would make all-out efforts to stabilise financial markets by deploying contingency plans and boosting liquidity by end-December.
MILITARY BACKLASH
In the latest sign of dissent within military ranks, the commander of South Korea's special forces said he was ordered to send his troops into parliament last week to stop a vote to reject martial law.
Colonel Kim Hyun-tae, the commanding officer of the 707th Special Missions Group, told reporters he took responsibility for his troops' actions but he was acting under orders from then defence minister Kim Yong-hyun.
"We were all victims who were used by the former defence minister," the colonel told reporters outside the defence ministry in Seoul.
He said he had not told the military about his plan to speak to the media out of fear he might be stopped.
Yoon's decision to declare emergency rule and grant the military sweeping powers stirred protests on the streets and raised alarm among Seoul's allies.
U.S. Defense Secretary Lloyd Austin scrapped plans to travel to South Korea and Secretary of State Antony Blinken called his South Korean counterpart, saying he expected the democratic process to prevail.
The United States has 28,500 troops stationed in South Korea as a legacy of the 1950-1953 Korean War.
The turmoil in Seoul comes at an important geopolitical moment in the region, with North Korea allegedly sending troops to help Russia's war against Ukraine amid growing military ties between Moscow and Pyongyang.
(Reporting by Hyunsu Yim and Ju-min Park; Writing by Jack Kim; Editing by Stephen Coates)
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