The country's President Park Geun-hye is accused of having allowed her close friend Choi Soon-sil to "exert undue influence" on policy-making, despite having no official Governmental role.

Park, South Korea's first female leader four years into a single five-year term, apologised last week for letting Choi help prepare speeches early in her tenure.

But it is alleged that 60-year-old Choi and other members of her family had a far deeper influence across economic, foreign and defence policy, while also profiting from related business ventures.

The scandal is currently overshadowing all other affairs in the next Olympic host nation and it is possible this is delaying ongoing discussions on the next Pyeongchang 2018 budget.

The Games has now been directly implicated after allegations that Choi's daughter, former dressage competitor Jang Si-ho, was accused of exercising influence in sports-related state projects.

According to local news channel JTBC, Jang sought to manage the Gangneung Oval venue due to be used for speed skating at the Olympics. 

It was announced in April that the venue would be changed from a temporary to a permanent venue, something insidethegames understands surprised members of the International Olympic Committee Coordination Commission due to fears it may become a white elephant after Pyeongchang 2018. 

It was not announced who will manage the venue but JTBC claim that the Government received a successful proposal from the Jang-run Korea Winter Sports Elite Center (KWSEC).

It is alleged she convinced the Government to change their earlier plan and was hoping to relocate the national team from their current base in Seoul east to Gangneung.

"All venue projects are handled through open tender via government’s Public Procurement Service. Pyeongchang 2018 onstruction projects cannot be influenced in any way by outside factors and bidding rules cannot be adjusted to benefit a certain party," a spokesperson for the Organising Committee told insidethegames today.

Pyeongchang 2018 had announced in January how spending would be monitored by the Government in Seoul to ensure there was no corruption.

Jang founded the KWSEC in June 2015, with the organisation collecting subsidies from the Ministry of Culture, Sports and Tourism worth KRW ₩670 million won (£475,000/$587,000/€529,000), something considered "rare" for a new organisation. 

The Ministry have now said they will stop giving money to the centre.

President Park today nominated Kim Byong-joon, a former top policy adviser who represents the opposition Liberal Party, as her new Prime Minister in a reshuffle designed to appease her opponents.

This is the second successive occasion where the President of the Olympic host nation has been embroiled in a political scandal ahead of the Games.

Brazil's President Dilma Rousseff was impeached and removed from office ahead of Rio 2016 after being accused of manipulating the budget when successfully standing for re-election in 2014.

Park, however, is limited to a single term in office anyway, so cannot stand in elections scheduled for six weeks before the Olympics are due to open on December 20 in 2017

Choi is currently being questioned about the allegations.

Pyeongchang 2018 officials are still conducting discussion with the Government amid fears there will be an additional increase on the budget rise of KRW ₩600 billion (£386 million/$518 million/€468 million) announced earlier this year from the original sum of KRW ₩2.2 trillion (£1.4 billion/$1.9 billion/€1.7 billion).

Pyeongchang 2018 President Lee Hee-beom said during last month's IOC Coordination Commission visit that the budget should be finalised "sometime in October or November".

insidethegames has been told that budget plans are "still in the review process" and that there is no fixed date.