Icelandic Prime Minister Sigmundur David Gunnlaugsson offered to resign Tuesday amid an uproar caused by a massive data leak from a Panama law firm that suggested he and his wife secretly channelled funds to an offshore tax haven in the Caribbean.
The leak of 11.5 million documents from Panama-based law firm Mossack Fonseca, which details how money was funnelled to shell companies in tax havens, has called into question the finances of numerous politicians, sports stars and celebrities from across 80 countries.
Commenting for the first time on the so-called Panama Papers in Washington, US President Barack Obama said "tax avoidance is a big global problem" and that combating illicit tax havens has been an important topic of international meetings.
"There's always going to be some illicit movement of funds around the world, but we shouldn't make it easy," the US president said.
After obtaining the documents from a Mossack Fonseca employee, German daily Sueddeutsche Zeitung enlisted the help of the Washington-based International Consortium of Investigative Journalists (ICIJ) and other media organisations to analyze them.
Some 370 journalists in 78 countries were involved in evaluating the data dump, which disclosed the activities of 214,000 purported shell companies.
The Panama-based law firm at the centre of a massive data leak has rejected any wrongdoing.
In a four-page document, law firm Mossack Fonseca reiterated late Monday that it had "never been accused or charged in connection with criminal wrongdoing."
On Tuesday, a spokesman for the law firm told dpa it would seek legal redress against whomever leaked the documents.
"Obviously, no one likes to have their property stolen, and we intend to do whatever we can to ensure the guilty parties are brought to justice," the spokesman said via email.
The political and economic fallout from the leak is expected to expand in the coming weeks, with accusations targeting members of Russian President Vladimir Putin's inner circle among other public figures.
In Iceland, Gunnlaugsson offered to step down following a meeting of lawmakers from his Progressive Party, in a bid to salvage the coalition government, Fisheries and Agriculture Minister Sigurdur Ingi Johannsson said.
Gunnlaugsson, who faces a looming no-confidence vote and had been urged to resign following the leak, suggested Johannsson replace him as premier in a bid to avert new elections. The current government's term is scheduled to end in April 2017.
The publication of the data has reignited the debate over how the world's wealthy make use of tax-avoidance schemes not available to most of the world's population.
Casey Kelso of the advocacy group Transparency International told dpa that the Panama disclosures were "not new but they put a human face on the financial flows that were known to be taking place."
To tackle the problem, the group proposed that "governments publish the list of the real owners of every company in every country. Period. It's simple and ambitious and it's possible," Kelso said.
China Tuesday blocked access to the Panama papers on the website of the ICIJ, one of the agencies compiling the material.
Beijing also issued censorship orders to remove all references to the scandal from local media posts, and block searches for Panama or the names of Chinese nationals in the report, according to a report by Hong Kong-based China Digital Times.