Olmert has "no other option" but to take a leave of absence, Tzipi Livni told an urgent Kadima faction meeting in Petah Tikva. Her remarks followed Attorney General Menachem Mazuz's decision to seek an indictment against the prime minister for his alleged involvement in the Rishon Tours double-billing affair, Ynetnews.com said.

Livni cited Olmert's response to the sexual harassment allegations against former President Moshe Katsav and the de facto resignation of slain Prime Minister Yitzhak Rabin in 1977 following a banking dispute.

"The PM, just as any other citizen, is innocent until proven guilty, but the citizen Ehud Olmert must conduct the battle (to clear his name) from home and not from his Knesset seat," she said.

Livni replaced Olmert as Kadima chief following the Sept. 17 primary elections.

In the Rishon Tours affair, Olmert is suspected of collecting $85,000 more than the cost of speaking tours he made abroad on behalf of non-profit organizations and working trips he made in his ministerial capacity.

He allegedly double-billed or overcharged for the events, then used the money to finance private trips for himself and his family or to upgrade flights.