VALLETTA — The decision to deny immunity to a suspect ready to offer information on the murder of a journalist, while a top politician implicated in the affair walked free, sparked outrage in Malta on Friday.

An intensifying probe into the murder of Caruana Galizia, who was blown up by a car bomb in October 2017, has destabilized Joseph Muscat's government, though the prime minister has rebutted repeated calls for his resignation.

"Muscat must go. But that is no longer enough. Now, Muscat's own behavior should be subject to investigation," said the Times of Malta, as civil society groups vowed to take to the streets in protest.

This week saw two ministers and Muscat's chief of staff Keith Schembri step down from their posts. Arrested on Tuesday, Schembri was released on Thursday without being charged, sparking accusations of a cover-up.

And in the early hours of Friday Muscat said the main suspect in the 2017 killing of the investigative blogger, tycoon Yorgen Fenech, would not be granted immunity to disclose what he knows about the case.

"Every minute (Muscat) remains in office he increases the risk of justice not being done," opposition leader Adrian Delia said.

Muscat has been heavily criticized over the handling of the case, amid allegations he has obstructed justice by protecting high-profile politicians. Earlier this week he vowed to resign if links were found between himself and the murder.

He insisted Friday that he would remain in power, telling reporters he wanted "this case to be closed under my watch".

His comments, made after a marathon six-hour cabinet meeting, were met with cries of fury from protesters outside.

"It's outrageous. The prime minister has taken the law into his own hands to protect his best friend and himself from justice. Our democracy has collapsed," former opposition leader Simon Busuttil said on Twitter.

Muscat said he had recused himself from the decision over Fenech, since the suspect under police interrogation had identified Schembri as the mastermind behind Caruana Galizia's killing, according to sources.

Fenech, a tycoon whose business interests span the energy and tourism sectors, was arrested on his yacht last week after an alleged middleman in the murder, taxi driver Melvin Theuma, was offered a pardon to identify those involved.

That arrest was followed swiftly by the resignation of Schembri and tourism minister Konrad Mizzi, while economy minister Chris Cardona said he was "suspending himself".

Caruana Galizia, who exposed cronyism and sleaze within the country's political and business elite, had alleged that Schembri and then economy minister Mizzi had been involved in corruption. She had named Cardona in a separate case.

Leaked emails revealed in court appeared to show both Schembri and Mizzi stood to receive payments from a company called 17 Black, owned by Fenech.

The Caruana Galizia family expressed incredulity over Schembri's release, pointing to the fact the former chief of staff and Fenech have the same doctor, who reportedly served as an intermediary, passing secret notes between them.

Sources close to the police investigation said that investigators were not convinced Fenech could be trusted.

The death of Caruana Galizia has raised grave concerns internationally over the rule of law on the tiny Mediterranean island.

"This is happening in the EU, right now. Where is the voice of the European Commission or other EU leaders?" Robert Barrington, former head of Transparency International in the UK, said on Twitter.

"Does the EU stand for the rule of law, justice, tackling corruption, no impunity — or not?" he asked.

The European Parliament is planning to send a mission to Malta, German Greens MEP Sven Giegold said on Thursday.

Council of Europe Commissioner for Human Rights Dunja Mijatovic said Friday she had urged the Maltese government to ensure the investigation into the murder was "fully independent".