Sigurdur Ingi Johannsson, the Icelandic Prime Minister, has resigned after his party lost votes to the Pirate Party in the country's general election.
Mr Johannsson made the announcement on national television after his centre-right Progressive Party saw its vote share and number of parliamentary seats more than halved.
"This was in accordance with the constitution, to hand in my resignation and then be asked to stay in office until a new government has been formed", Mr Johannsoon told a news conference.
HIs party's electoral thumping came at the hands of the Pirate Party, whose populist, anti-establishment message has gained traction in recent months.
Polls had suggested the party was on course to win the election but it eventually finished behind the Independence Party, which had formed part of Mr Johannsson's coalition government.
The Pirate Party won ten seats in the 63-seat parliament - up from the three it won at the 2013 general election - while the Independence Party finished with 21 seats.
The ruling centre-right parties fell short of a majority needed to form a government, raising the prospect of a left-wing coalition possibly including the Pirate Party.
Mr Johannsson has been prime minister since April, when his predescessor, Sigmundur David Gunnlaugsson, was forced to quit after being implicated in the tax avoidance scandal revealed by the release of the Panama Papers.
Reports that Iceland's political and financial elite had sheltered money in offshore accounts compounded public anger following the 2008 financial crisis, which led to a huge financial collapse in which many Icelanders lost money.
The Pirate Party was formed in 2012 to campaign against strict copyright laws.
It has enjoyed a metoric rise in the past yaer, winning over Icelandic voters with promises to fight corruption, give voters a direct say over policy and decriminalise drugs. Accepting the bitcoin currency and granting asylum to US whistleblower Edward Snowden were amongst other policy pledges.
Despite her party falling short of expectations, Pirate Party leader Birgitta Jonsdottir said she was happy with the result.
"Whatever happens, we have created a wave of change in the Icelandic society", she said.
"Our internal predictions showed 10 to 15 percent, so this is at the top of the range. We knew that we would never get 30 percent".
More to follow...
