Belgian King Albert II was to decide late Friday whether to refuse or accept the resignation.
The separation of powers is a cornerstone of Belgian parliamentary democracy and the alleged attempts by the government to influence the course of judicial process have infuriated partners in a coalition government that was already shaky.
"Shocking. This does not belong in the rule of law," said Bart Somers, the chairman of the ruling Dutch-Speaking Liberal party.
"A cornerstone of democracy has been put in danger."
The allegations also raised huge questions about the government's handling of the financial meltdown.
The future of Fortis, once the country's largest bank, is now in question as the government tries to proceed with the sale of most of the business to France's BNP Paribas. Thousands of jobs are at risk and many Belgian shareholders have seen their stakes become nearly worthless.
Leterme heads a coalition of Christian democrats, liberals and socialists, split into Dutch-speaking and Francophone parties.
On Wednesday, Leterme told parliament that there had been contacts but insisted the contacts never amounted to pressure and that he had never tried to influence the court's decision. But a new report from the Court of Cassation, the nation's highest court, cast doubt Friday on assertions that the government had not tried to exert influence.
"I deduce from the statement of the Chairman of the Court of Cassation that it cannot be guaranteed that my actions in the Fortis dossier were legal," Vandeurzen said in his letter of resignation.
The Fortis case has been one of Leterme's biggest tests since he became prime minister in December 2007. His coalition ended six months in witch Belgium had no government. No party won a clear majority in the June 2007 elections.
Fortis was forced to repeatedly seek government help during tight credit conditions and was eventually carved up, selling off most of its business in Belgium, Netherlands and Luxembourg.
Angry shareholders holding near-worthless stakes in Fortis, as a stripped-down insurer carrying some toxic assets, won a Belgian appeals court challenge to the government takeovers and selloffs last week. The court ruled the shareholders should have been consulted on any major deals.
The appeals became the undoing of Vandeurzen. The legal case effectively blocked BNP Paribas' purchase of 75 percent of Fortis' Belgian banking operations and all of its Belgian insurance operations for euro14.5 billion ($19.8 billion).
