South Korean President Lee Myung-bak 's son avoided indictment over his involvement in a controversial purchase of land for the president's post-retirement residence, prosecutors who led a month-long probe into the scandal announced Wednesday.

Instead, a team of special prosecutors said they have handed over tax records of 34-year-old Lee Si-hyung to the state-run National Tax Service over suspicions of gift tax evasion.

They have indicted former presidential security chief Kim In- jong and two other officials of the Presidential Security Service, which jointly bought 462 square meters of land with Lee Si-hyung last year for the residence, on charges of breach of trust.

The findings were announced after a 30-day investigation by the independent counsel, recommended by the main opposition Democratic United Party and begrudgingly appointed by the president who was pressured into scrapping his plan for the retirement home in an affluent neighborhood in southern Seoul.

"The team made best efforts to make a right legal judgment based on probe findings," independent prosecutor Lee Kwang-bum told reporters during a press briefing.

Media revelations last year that the plot was purchased in the junior Lee's name sparked allegations that he violated South Korea 's real estate law.

The president's only son was also suspected of misappropriating taxpayers' money by purchasing the land at a below-market price and letting the security service pay more.

The scandal has been the latest embarrassment for the president, whose closest aides and elder brother Lee Sang-deuk were jailed for their involvements in a series of corruption scandals.

Both Lee Si-hyung and the eldest of the president's three brothers, Lee Sang-eun, were summoned by the prosecutors for questioning, and first lady Kim Yoon-ok recently submitted a written statement on a loan she made to her son.

The president on Monday rejected the prosecutors' request for extending the investigation by 15 days, citing its potential influence on the upcoming presidential election.

His office Cheong Wa Dae, which had claimed the land was bought in Lee Si-hyung's name due to security concerns, voiced strong dissatisfaction with the probe findings.

"The presidential office cannot help but express regret over some of the decisions made by the special prosecutors," senior secretary for public relations Choi Keum-lak said in a statement, rejecting claims of an attempted gift tax evasion by Lee Si-hyung.

The land in question has already been sold to the state and Lee Si-hyung paid back money he owed to Lee Sang-deuk and the Cheong Wa Dae branch of Nonghyup Bank, Choi said, rejecting allegations of gift tax evasion.

The state-run tax agency is unlikely to bring charges against the president's son, according to industry sources cited by local media.

The 71-year-old president, who is currently immune from criminal charges related to the retirement home controversy, has been dogged by scandals throughout his political career.

Before being elected to lead South Korea, Lee had been mired in a financial scam that implicated his former colleague at an investment company called BBK.

Despite a probe by special prosecutors that acquitted Lee of charges of fraud related to the BBK scandal, opposition parties have claimed the prosecutors were intimidated into going easy on the then president-elect.

The presidential election is slated for Dec. 19, with Lee constitutionally barred from seeking re-election.