Panama Papers: Iceland's Prime Minister Sigmundur Gunnlaugsson Resigns

Iceland Prime Minister resigns Pirate Party Panama
Iceland Prime Minister Sigmundur Gunnlaugsson attends a session of parliament in Reykjavik, Iceland, April 4. Gunnlaugsson resigned on Tuesday after leaked "Panama Papers" tax documents showed he and his wife used an offshore firm to allegedly hide million-dollar investments. HALLDOR KOLBEINS/AFP/Getty Images

Iceland's prime minister has resigned after questions were raised about his finances in the "Panama Papers" leaks, a member of the Icelandic government has said.

Sigmundur Gunnlaugsson is the first political figure to step down from office as a result of the scandal; he is expected, however, remain as leader of the Progressive Party.

Agriculture Minister and the Progressive Party's deputy leader Sigurdur Ingi Johannson broke the news of Gunnlaugsson's resignation to Icelandic broadcaster RUV.

"The prime minister told [his party's] parliamentary group meeting that he would step down as prime minister and I will take over," Johannsson told a live broadcast.

Gunnlaugsson's resignation follows street protests in Reykjavik in which thousands of Icelanders took part.

Documents leaked on Monday allege that Gunnlaugsson and his wife set up a company in the British Virgin Islands that he then did not disclose to parliament. Critics say that the company's reported holdings in Icelandic banks mean Gunnlaugsson has a conflict of interest.

Gunnlaugsson has denied any wrongdoing.

Writing in Newsweek, Birgitta Jónsdóttir, parliamentary chair of Iceland's opposition Pirate Party said: "If this was a comedy it would be funny but this is actually our head of state. This is not what Icelanders are like and this is not what Iceland is."