(Adds referendum scrapped, para 4)
By Andrius Sytas
VILNIUS, Jan 13 (Reuters) - Estonia's president on Wednesday asked the leader of the opposition centre-right Reform Party, Kaja Kallas, to form the next government after Prime Minister Juri Ratas resigned over an inquiry into a property development.
Kallas, whose party won the 2019 election but was outmanoeuvred by Ratas, will need support in parliament for the nomination.
The next government is unlikely to include the far-right EKRE party, whose leaders denounced the U.S. election result as rigged and called President-elect Joe Biden "corrupt".
Kallas is a critic of the outgoing government's proposed referendum on whether marriage should be defined as being between a man and women. The outgoing coalition scrapped the referendum plan on Wednesday.
News wire BNS said Ratas' party was declared a suspect on Tuesday in a criminal investigation over a property development project in Tallinn.
"While there definitely are other ways to go about it, only one of them seemed to be right," Ratas, who has denied any knowledge of wrongdoing, told reporters, according to BNS.
He made the decision to resign after a party meeting to discuss the charges, which dragged into the early hours of Wednesday, BNS added.
Prosecutors allege the development was promised permission to build a road on city property, in exchange for a donation of up to 1 million euros to the party ahead of municipal elections, BNS reported.
Ratas, prime minister since 2016, lost the 2019 general election, in which Kallas' centre-right Reform Party emerged the biggest party.
Ratas then blocked the winner from taking power by forming a coalition of his left-leaning Centre party, the conservative Fatherland party and EKRE that gave the three parties a majority in parliament.
EKRE's outspoken leaders have caused turmoil in the administration's two years in power.
In December 2019, Estonia apologised to Finland after one of them mocked its new prime minister - the world's youngest-serving government leader - as a "sales girl" and questioned her ability to run the country.
This month they claimed the election result in Lithuania and a change in government in Romania were both influenced by the "deep state".
Estonia's next general election is due in March 2023. (Reporting By Andrius Sytas Editing by Clarence Fernandez, Robert Birsel, Giles Elgood, William Maclean)