Panama Papers fallout

Panama Papers fallout: Iceland's prime minister resigns

By Tim Hume and Zoe Robert

Icelandic Prime Minister Sigmundur David Gunnlaugsson has resigned, the deputy chair of Iceland's Progressive Party said Tuesday.

Gunnlaugsson had been under intense pressure to step down since leaked documents hacked from a Panamanian law firm revealed his links to an offshore company, triggering mass protests in the capital.

Gunnlaugsson has been under intense pressure to resign since leaked documents hacked from a Panamanian law firm revealed his links to an offshore company, triggering mass protests in the capital Monday.

Critics said the revelations around the company, which allegedly had holdings in Iceland's collapsed banks, have shattered public confidence in his leadership and could affect the country's international reputation.

On Tuesday, Gunnlaugsson said he planned to dissolve parliament and call for fresh elections as soon as possible if lawmakers from his party's coalition partner -- the Independence Party -- did not support his government.

But after meeting with Gunnlaugsson, Iceland's President Olafur Ragnar Grimsson said he would not consider the request to dissolve parliament before he had spoken with both parties in the coalition, according to Iceland's national public service broadcaster RUV.

Gunnlaugsson has led the island nation of 330,000 people since 2013, his Progressive Party governing in a center-right coalition government with the Independence Party.

An estimated 10,000 demonstrators -- a huge number considering the population -- packed the streets Monday evening outside parliament in Reykjavik as opposition lawmakers called for a vote of no confidence in the Prime Minister.