Bulgaria's parliament has voted down a proposal to set up a special body to probe the appointment of the former head of a Bulgarian agency overseeing hundreds of millions of euros in EU farm aid, who got the job using a faked German university diploma.

The opposition Socialist Party, which tabled the proposal, said it is important to find out who is responsible for the staff policy in the agriculture sector, which has often been a washout with dire consequences.

The ruling GERB party however demanded that the case is handled by the prosecutor's office alone.

In 2009, Kalina Ilieva became head of the state agency handling payments from the European Union, of which Bulgaria became a member. She was 28 at the time.

Her job was to implement stricter oversight over EU-funded projects, after several corruption affairs saw Brussels sever aid to Bulgaria. The EU unblocked all aid in November 2009.

Ilieva now faces charges in both Bulgaria and Germany after it turned out that the diploma she produced before being hired, claiming to have graduated from the Berlin University for Engineering and Economics, was faked.

The scandal erupted at the end of last month, when it also emerged that she has flooded the EU anti-fraud agency with hundreds of fraud signals.

Officials have warned that the European Commission may press Bulgaria into paying back more than BGN 200 M as many of the blacklisted companies have won their cases against Ilieva in court.

Reports also say Bulgaria's Agriculture Minister Miroslav Naydenov's phone conversations have been tapped for more than six months as a result of a signal from the discredited former head of the Agriculture Fund.

Previously, she lied she had a tumor and was very ill in an attempt to conceal her pregnancy, which led to her removal from the post in October.

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