Israel's attorney general decided not to file charges against Prime Minister Ariel Sharon in a campaign funding scandal but indicted his son today, the Justice Ministry said.
Attorney General Menachem Mazuz closed a three-year-old investigation of Mr Sharon, citing insufficient evidence of involvement in setting up shell companies to funnel foreign donations to his 1999 primary campaign.
An indictment of Mr Sharon could have jeopardised his "disengagement" plan after parliament on Wednesday removed a major hurdle by approving compensation to Jewish settlers to be evacuated from occupied land in Gaza and parts of the West Bank.
But Mr Sharon's son and close adviser Omri (40) was indicted on criminal charges, including fraud, breach of trust and perjury. A legal expert told Israel Radio he could face up to seven years in prison if convicted.
Mr Sharon had denied any wrongdoing in the funding case, saying his two sons alone handled the financing for his 1999 primary campaign for leadership of the right-wing Likud party. Mr Sharon's sons had remained silent on the scandal.
Prosecutors will have to ask the Knesset to lift parliamentary immunity for Mr Omri Sharon, a member of the assembly, to put him on trial.
Mr Sharon and his sons also face a separate investigation into allegations that a $1.5 million loan from a South African businessman was used as collateral to repay alleged illicit contributions to his primary race.
Foreign funding of political campaigns is illegal in Israel.