The Governor of Illinois was arrested today for trying to sell off Barack Obama's vacated US Senate seat in an explosive case that has cast a spotlight on endemic corruption in the President-elect's home state.

Prosecutors charged that Rod Blagojevich, the two-term Democratic governor, discussed trading the open Senate seat for a position in President-elect Obama's Cabinet, and also considered asking for a substantial salary for himself at a non-profit foundation or a trade union affiliate, a lucrative corporate directorship for his wife, and even cash up front.

His chief of staff, John Harris, has also been arrested.

FBI wiretaps allegedly caught the governor saying that the Senate seat "is a f***ing valuable thing, you just don't give it away for nothing".

In a secretly recorded conversation on October 31, Mr Blagojevich claimed he was offered a deal by an associate of an unnamed "Senate Candidate 5".

"We were approached 'pay to play'. That, you know, he'd raise 500 grand. An emissary came. Then the other guy would raise a million, if I made him [Senate Candidate 5] a Senator," the governor allegedly said.

A 76-page FBI affidavit said Mr Blagojevich pondered getting a Cabinet post or ambassadorship for himself in return for the Senate seat – a position that only the incoming Obama Administration would be able to give.

He was also recorded as saying that unless "I get something real good", he would appoint himself as Senator. "I'm going to keep this Senate option for me a real possibility, you know, and therefore I can drive a hard bargain. You hear what I'm saying. And if I don't get what I want and I'm not satisfied with it, then I'll just take the Senate seat myself."

FBI agents listened to Mr Blagojevich discussing individual candidates for the seat, and overheard him say: “Unless I get something real good for [Candidate 1], sh**, I’ll just send myself, you know what I’m saying.”

The Governor, who was arrested in the early hours of this morning at his Chicago home, was also charged with trying to use state funding to force the owners of the Chicago Tribune to dismiss the newspaper's editorial board because of their calls for the governor's impeachment.

Mr Blagojevich was also accused of conspiring with Antoin "Tony" Rezko, a former friend and political donor of Mr Obama, in "pay-to-play" schemes requiring individuals and companies to pay kickbacks in return for state contracts.

Mr Obama has taken pains to distance himself from Mr Rezko, who was convicted of corruption in June, despite the fact that Mr Rezko's wife helped the Obamas buy their Chicago home by purchasing the adjacent garden in a simultaneous transaction in 2005.

Though Mr Obama is not implicated in the governor's case, the prosecution threatens to cause him political embarrassment by highlighting his ties with Mr Rezko, who is awaiting sentencing on January 6.

The charges against Mr Blagojevich focus, however, on the period after October when, prosecutors say, he sought to raise $2.5 million in campaign contributions by the end of the year before a new ethics law came into force banning donations from people who benefit from state contracts.

Last weekend, prior to his arrest, Mr Blagojevich was quoted as saying people should “feel free” to bug his phone lines as everything he said was lawful. He compared those who surreptitiously bug communications to former President Richard Nixon, who resigned over the 1972 Watergate bugging scandal.

But Patrick J. Fitzgerald, the renowned federal prosecutor who won the conviction of both Daily Telegraph chairman Conrad Black and the US vice-president's chief of staff Lewis "Scooter" Libby, said in a statement that "the breadth of corruption laid out in these charges is staggering."

"They allege that Blagojevich put a 'for sale' sign on the naming of a United States senator, involved himself personally in pay-to-play schemes with the urgency of a salesman meeting his annual sales target; and corruptly used his office in an effort to trample editorial voices of criticism," Mr Fitzgerald said.

Mr Blagojevich’s chief fundraiser, Christopher G Kelly, is due to stand trial early next year on charges of obstructing the Internal Revenue Service.

Mr Blagojevich took the chief executive’s office in 2003 as a reformer and anti-corruption candidate. His predecessor, Governor George Ryan, was sentenced to a six-year prison sentence after being convicted on racketeering and fraud charges.

A decade-long investigation began with the sale of drivers' licences for bribes and led to the conviction of dozens of people who worked for Ryan when he was secretary of state and governor.

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