( CNN ) -- South Korea 's prime minister has offered to resign , his communications office said Monday , after failure to win parliamentary approval to stop relocation of government offices out of the capital , Seoul . Prime Minister Chung Un-chan verbally offered to resign , but President Lee Myung-bak did not accept his offer , the office said . Chung offered to resign after failure to win the parliamentary approval , a major setback to Lee 's government and a sign that his party is losing clout . The president 's Grand National Party has taken a beating in local elections , which analysts see as a referendum on his handling of the Cheonan incident . The South Korean naval ship Cheonan sank March 26 in disputed waters . The loss of the ship and 46 sailors raised tensions on the Korean Peninsula . North Korea has vehemently denied charges it fired a torpedo that sank the Cheonan . CNN 's Roya Shadravan contributed to this report .
South Korea 's prime minister offers to resign . President Lee Myung - bak declines to accept his offer . Japan 's Grand National Party has taken a lead in the polls .