The prime minister of Iceland said Tuesday he would resign following mass protests triggered by reports from ICIJ and partners that he had owned an offshore company in the British Virgin Islands with his wife, Icelandic state media reported.

Prime Minister Sigmundur David Gunnlaugsson said he would stay on as chairman of the Progressive Party but tapped Sigurdur Ingi Johansson, his minister of agriculture, to be the next prime minister, in a bid to save the ruling coalition. At the time of writing, his resignation had not yet been accepted by the Iceland's president.

Gunnlaugsson, who came to power in 2013 promising to put the national interest over financial interests after the 2008 collapse of its financial system, failed to disclose when he entered parliament in 2009 that he had owned millions of dollars worth of bonds in the collapsed banks as half-owner of an offshore company called Wintris Inc.

Protesters outside Iceland's parliament in Reykjavik on Monday
Protesters outside Iceland's parliament in Reykjavik on Monday Image: Photo\\: Jóhannes Kr. Kristjánsson / Reykjavik Media
That violated parliamentary ethics rules and was an undisclosed conflict of interest. Gunnlaugsson sold his half of Wintris to his wife, Anna Sigurlaug Palsdottir on the last day of 2009. Palsdottir, a wealthy heiress, has said Wintris was hers all along and that a bank error resulted in her husband being listed as co-owner.

Opposition parties, which have called for a vote of no confidence following the Panama Papers revelations about Gunnlaugsson's family's offshore holdings, said the prime minister's resignation is unlikely to save the government.

Organizers had planned another large protest today.

Gunnlaugsson's resignation is the first major political fallout from
ICIJ's Panama Papers investigation, which found 12 heads of state, 61 of
their relatives, and 128 other public officials connected to secret
offshore companies

Gunnlaugsson was first asked about the offshore company, Wintris Inc., during an interview with ICIJ media partners SVT and Reykjavik Media. He told reporters that the company was fully declared to the Icelandic tax authority, and then walked out of the interview.