Guatemalan President Otto Perez suffered a double setback, after the country's top prosecutor called for his resignation and his ex-vice president was remanded in custody for tax fraud.

The prosecutor general "recommends that the constitutional president of the Republic of Guatemala offer his resignation to stave off the inability to govern that national instability could cause," said a statement from the office, which acts as representative of the state in legal affairs.

The move comes amid new demonstrations across the country demanding that the president step down, and as prosecutors and a special UN investigative commission accuse him of masterminding a customs bribery ring along with his vice president.

Earlier, Vice President Alejandro Maldonado, who in May replaced Roxana Baldetti, took to Twitter to urge civil security forces to "exercise restraint without lethal weapons" when facing protesters, and asked the army to remain "oblivious to the (political) conflict."

Prosecutors have sought to open an investigation of the president, who as chief executive enjoys immunity from prosecution. The high court allowed the request to move forward, a spokesman said.

The measure will now be sent on to lawmakers, who will address on Thursday whether Perez's immunity will be stripped.

A judge ruled earlier Wednesday that former vice president Baldetti must remain in jail pending trial on charges of defrauding the customs service of millions of dollars.

Judge Miguel Angel Galvez said he considered it "prudent" to deny bail to Baldetti, arguing she posed a flight risk because she also has Italian citizenship.

Galvez also said he wanted to prevent her from obstructing the case against her.

"We must take into consideration in the present case that... the investigation concerns people who were involved in the Guatemalan state, especially high-level public officials," he said.

The 53-year-old is accused of running a scheme in which businesses bribed officials to clear their imports through customs at a fraction of the actual tax rate.

Prosecutors accuse her of taking a 50 percent cut on all illegally slashed customs payments, for a total of some $3.8 million between May 2014 and April 2015.

- Perez increasingly isolated -

The scandal erupted in April, when the UN's International Commission Against Impunity in Guatemala accused one of Baldetti's top aides of involvement in the bribery scheme.

Baldetti resigned on May 8.

The case has been dubbed "La Linea," for the hotline investigators say importers would call to access corrupt officials.

Investigators say their findings are based on some 86,000 wire-tapped phone calls that implicate both Perez and Baldetti.

They have also presented checks allegedly paid to Baldetti as bribes and documents described as internal communications from the corrupt network.

Mass protests have erupted over the scandal as the country prepares to hold elections on September 6 to decide Perez's successor.

The president, a conservative retired general in office since 2012, is not eligible to stand for re-election.

He has apologized for the fact that the graft took place on his watch, but denied involvement and rejected calls to resign before his term ends in January.

Perez has been left increasingly isolated by the scandal.

In recent days, scores of government officials, including six of his 14 ministers, resigned, while business leaders broke their alliance with the president and demanded his resignation.

Source: AFP