Romania's centre-right President Klaus Iohannis on Friday asked for the resignation of Prime Minister Victor Ponta, who is facing investigation by the country's anti - corruption agency.

A decision by the powerful DNA anti-corruption agency to probe Ponta for alleged money laundering and tax evasion puts the country in "an impossible situation", Iohannis said after talks with his political rival, a social - democrat.

"The worst that could happen would be to have a political crisis" in the small and struggling EU country, Iohannis said.

But Ponta, who lost to Iohannis in a bid for the presidency in November, appeared set to hold tight on the premiership.

"Only parliament can unseat me," he said on Facebook. "I respect the president's public position but I was named to this position by parliament", where the leftwing coalition led by his social-democrat party has a large majority.

"The respect of constitutional principles is essential to our society and in no case could I accept that a prosecutor be above parliament, the government and citizens," Ponta added.

If that were the case it would be "dictatorship", he added, a strong slur in a country that ousted its communist regime 25 years ago.

Romania's prosecutors earlier Friday said they were launching a criminal probe into Ponta on suspicion of involvement in tax evasion, money laundering and conflict of interest.

The prosecutors will file a formal request for an investigation with parliament, which would have to strip the premier of his immunity for the probe to proceed, said a statement from the country's anti-corruption agency DNA.

The head of government is suspected of "forging documents ... (and) continuous complicity in tax evasion" and money laundering when he was a lawyer in 2007, said the agency, which is part of the prosecutor's office.

The case is linked to another corruption probe against his political ally Dan Sova, a member of parliament who briefly held the transport portfolio in the cabinet from March to June 2014.

The probe is the latest in a string of anti-corruption enquiries carried out by the powerful agency, probes that have led to the removal of several influential Romanians over the past months.