Panama Papers: Iceland PM requests dissolution of parliament

Icelandic Prime Minister Sigmundur Gunnlaugsson has requested a dissolution of parliament after allegations he concealed millions of dollars worth of investments in an offshore company, but it was turned down by the country's president.

In a statement on Facebook, Gunnlaugsson said he had met on Tuesday with coalition Independence Party leader Bjarni Benediktsson and said "if the party's parliamentarians think they cannot support the government in completing joint tasks, I would dissolve parliament and call a general election".

Gunnlaugsson put his request to President Olafur Ragnar Grimsson after the opposition proposed a no-confidence motion.

However, Grimsson had refused and was delaying a decision until he has spoken to the main political parties.

“I need to determine if there is support for dissolving (parliament) within the ruling coalition and others. The prime minister could not confirm this for me, and therefore I am not prepared at this time to dissolve parliament," he said.

Former journalist and radio host Gunnlauggson said he was proud of his work in politics and "not afraid to put it to the verdict of the electorate, whether it will be done now or later".

"I am also proud of my wife and the integrity and self-sacrifice which she has always shown."

Gunnlaugsson was named in huge leak of documents from Panamanian law firm Mossack Fonseca which showed he and his wife owned offshore firm called Wintris which he had not declared when he entered parliament.

He walked out of a TV interview on Sunday when asked about the tax haven.

According to the leaked documents, Gunnlaugsson did not declare an interest in the company when entering parliament in 2009. He sold his 50% of Wintris to his wife, Anna Sigurlaug Palsdottir, for $1 (70p), eight months later.

Gunnlaugsson says no rules were broken and his wife did not benefit financially.

The documents show Gunnlaugsson was granted a general power of attorney over Wintris, which meant he could manage the company. They also show Wintris had significant investments in the bonds of three major Icelandic banks that collapsed during the financial crisis which began in 2008.