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Iceland prime minister resigns over Panama Papers revelations

Sigmundur Davíð Gunnlaugsson has resigned as Iceland’s prime minister. Photograph: Brynjar Gunnasrson/AP

Iceland’s embattled prime minister, Sigmundur David Gunnlaugsson, has tendered his resignation in the wake of a mounting political crisis over his family’s offshore investments, local media have reported, but his departure has yet to be agreed by either his coalition partners of the country’s president.

The agriculture and fisheries minister, Sigurour Ingi Johannsson, told state broadcaster RUV that Gunnlaugsson had resigned.

Local media said the move needed approval of both the rightwing Independence party and the president, Olafur Ragnar Grímsson, before it could be official.

Reports said Gunnlaugsson would stay on as chairperson of his Progressive party, and Jóhannsson would take his place as prime minister.

The leader of the Independence party, finance minister Bjarni Benediktsson, was reportedly in talks with Grímsson on Tuesday afternoon.

The Prime Minister's decision to step down was after the Panama Papers reportedly linked him to an offshore company.

The leaked documents are said to show Sigmundur David Gunnlaugsson and his wife owned a firm in the British Virgin Islands which held £2.8m of investments in Iceland's collapsed banks.

Thousands of demonstrators protested outside parliament in Reykjavik on Monday, throwing eggs, bananas and yoghurt and calling for him to stand down.

Sky News reported that Mr Gunnlaugsson earlier requested the President dissolve parliament and call new elections after the left-wing opposition called a vote of no confidence in the government.

But President  Olafur Ragnar Grimsson refused, saying he wanted to consult the main parties before making his decision.

Mr Gunnlaugsson is the first casualty of the millions of papers which apparently show the ways the rich and famous can exploit offshore tax regimes.

They were leaked to various media organisations from Panama-based law firm Mossack Fonseca.

The leaked documents concern Wintris Inc, a company Mr Gunnlaugsson allegedly created in 2007 with his partner at the time, Anna Sigurlaug Palsdottir, now his wife.

He is reported to have sold his half of the company to Ms Palsdottir for $1 on 31 December 2009 - the day before a new law came in that would have required him to declare the ownership of Wintris as a conflict of interest.

On Monday, Mr Gunnlaugsson stormed out of a media interview about the papers. He later apologised.