The video appeared to show Mr Strache discussing government contracts with an alleged Russian investor in return for campaign support.

He also appeared to hint at a potentially illegal donation system for the far-right Freedom Party he leads.

He blamed his actions on alcohol and acting like a "teenager."

Mr Strache said that transport minister Norbert Hofer will replace him.

He said that his actions had been "stupid" and "irresponsible" and he was leaving to avoid further damage to the government.

Mr Strache claimed he was the "victim of a targeted political attack" that had used illegal means.

"There is still a lot to do because we want to continue implementing the government's programme and we stand by it out of responsibility for Austria and its people," the vice-chancellor said.

"As an individual I must not be the reason for stopping that and perhaps providing a pretext to break this government - for that was the aim of this illegal, smear campaign."

He also blamed his actions on being drunk and trying to impress a woman who was present and claimed to be the niece of a Russian oligarch.

"I was, yes, under influence of increasing drunkenness and yes it was a drunken story. I was tempted in an intimate atmosphere and with a loosened tongue to hold forth on all and everything. And yes what I said was, viewed in a sober light, disastrous and embarrassing," he said.

"It was typical alcohol-fuelled macho posturing where, yes, I probably wanted to impress the attractive hostess and I behaved boastfully like a teenager and acted in an exaggerated manner," he added.

Austrian Chancellor Sebastian Kurz of the centre-right People's Party was also due to give a statement on Saturday.

The damaging video featuring Mr Strache was allegedly filmed on the Spanish island of Ibiza in 2017, just months before elections brought him to power.

It was published on Friday in a joint report by Der Spiegel and the daily Süddeutsche Zeitung. It is unclear who set up the meeting and who filmed it.

The footage shows Mr Strache and Johann Gudenus - also a Freedom Party politician - talking to the woman. She told the pair that she was looking to invest in Austria.

Both politicians can be seen smoking and drinking while relaxing on sofas.

The woman offers to buy a 50% stake in Austria's Kronen-Zeitung newspaper and switch its editorial allegiance to the Freedom Party.

Mr Strache names several journalists who would have to be "pushed" from the newspaper.

He also appears to suggest that she could be awarded public contracts.

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