Sigmundur David Gunnlaugsson.jpg
Photograph: EPA/STR ICELAND OUT

Iceland's prime minister since 2013 formally resigned on Thursday in the wake of a data leak from a Panama-based law firm suggesting he and his wife had an offshore company in a Caribbean tax haven.

Sigmundur David Gunnlaugsson's resignation was made at a state council meeting at President Olafur Ragnar Grimsson's residence on the outskirts of the capital Reykjavik.

After the meeting, Gunnlaugsson left the residence in a government vehicle.

Gunnlaugsson had been under pressure to step down after he and his wife were implicated in a massive data leak from Panama-based law firm Mossack Fonseca. The data leak details how money was funnelled to shell companies in tax havens and calls into question the finances of numerous politicians, sports stars and celebrities from across 80 countries. Millions of documents were leaked to the German daily Sueddeutsche Zeitung that shared it with other news organizations in the International Consortium of Investigative Journalists (ICIJ).

The material reignited the debate over how the world's wealthy make use of tax avoidance schemes not available to most of the world's population.

Gunnlaugsson has denied any wrongdoing.

Shortly after Gunnlaugsson departed, the president met with prime minister-designate Sigurdur Ingi Johannsson and other cabinet members.

The revelations on Gunnlaugsson have resulted in public protests in Iceland where thousands of people assembled outside parliament in the past week calling for immediate elections.

A few dozen also gathered Thursday near the president's residence, some waving symbolic red cards.

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