President Lee Myung-bak on Monday decided to cancel his planned move after retirement to a newly purchased housing lot on the edges of Seoul in an apparent bid to quiet down controversy ahead of the Seoul mayoral by-election next week.

He will move back to his existing home in Nonhyun-dong, Gangnam-gu, upon retirement in February 2013.

Ruling Grand National Party chairman Hong Joon-pyo was the one to break the news after attending a luncheon meeting hosted by Lee, hoping to quell the squabble over the purchase of a 2,600-square-meter plot in Naegok-dong, Seocho-gu, 10 days after a weekly magazine reported it.

The plot bought by the Presidential Security Service will return to state ownership and follow-up measures on how to use the land will be discussed later, Hong said Monday in a press conference.

“The GNP has asked for the replacement of PSS chief Kim In-jong who is responsible for the purchase of the Naegok-dong residence,” Hong said. Kim has offered to resign, but it was not immediately known whether Lee accepted it.

Cheong Wa Dae had initially asked for a PSS budget of 7 billion won for the security service of Lee after retirement, which was reduced to 4 billion won in the National Assembly.

The presidential office explained last week that it picked a site in Naegok-dong along the city’s boundary because the price of additional property required for Lee’s bodyguards was too expensive around his home in Nonhyun-dong.

The PSS and Lee’s son Shi-hyeong bought the 2,600-square-meter plot in May, 462 square meters of which will be used for housing and the rest for security. Shi-hyeong bought the plot for 1.12 billion won, 600 million won of which came from bank loans and the remaining 520 million won which he borrowed from relatives, according to the presidential office.

Cheong Wa Dae said last week before Lee departed for his state visit to the U.S. that President Lee will get the property ownership transferred to his name as opposition parties demanded he identify the relatives and the “real reasons” for buying the plot under his 32-year-old son’s name.

Wary of the property dealing’s impact on the mayoral by-election next week, Hong said earlier Monday that his party has requested Cheong Wa Dae to review the construction of Lee’s new private residence.

Rep. Kwon Young-se, campaign chief for the GNP’s Seoul mayoral candidate Na Kyung-won, also tweeted that Lee’s office should consider scrapping the move after opposition politicians questioned why the plot was bought under the president’s son’s name.

Earlier Monday, Lee’s top aide for public relations Choe Guem-nak told reporters that the president asked his Chief of Staff Yim Tae-hee during a weekly meeting with his senior secretaries to “make a conclusion on the private residence matter,” expressing regret over causing “concern for many people.”

Rep. Lee Yong-seop, spokesman of the main opposition Democratic Party and former Minister of Construction, alleged in a press release Monday that the owner of a Korean restaurant on the Naegok-dong site sold the plot to the PSS and Shi-hyeong for 5.4 billion won, much lower than the 8 billion won quoted by a local realtor. The lawmaker demanded the presidential office explain how the plot was purchased for lower-than-market price.

In addition to the leaders of the GNP and the DP, National Assembly Speaker Park Hee-tae, Supreme Court Chief Justice Yang Sung-tae, Constitutional Court Chief Justice Lee Kang-kook, Prime Minister Kim Hwang-sik and National Election Committee chairperson Kim Nung-hwan attended the luncheon hosted by Lee on Monday.

By Kim So-hyun (sophie@heraldcorp.com)