Iceland veered closer to early elections Tuesday, but the country's president rejected a bid from beleaguered Prime Minister Sigmundur David Gunnlaugsson to dissolve parliament pending talks with other leaders.
Speaking after a meeting with Gunnlaugsson, President Olafur Ragnar Grimsson said he wanted to consult other party leaders, notably Gunnlaugsson's coalition partner, the Independence Party, if there was "support for dissolving" the legislature.
Gunnlaugsson faces a looming no-confidence vote in parliament, and has been urged to resign, following a claim that he and his wife secretly channelled funds to an offshore tax haven in the Caribbean.
The president was later Tuesday to meet Independence Party leader Bjarni Benediktsson, who has been finance minister since 2013 when the centre-right coalition took office.
Elections are not scheduled until next year, and with poor opinion polls both the Independence Party and Gunnlaugsson's Progressive Party are in no immediate rush to go to the polls.
Gunnlaugsson earlier met Benediktsson who cut short a visit to the United States. Afterwards, the prime minister said on Facebook that "if the parliamentarians of the (Independence) party are not willing to support the government in finishing their joint work, I would dissolve the parliament and call for elections as soon as possible."
He has denied any wrongdoing and said his wife had paid taxes due.
Thousands of people assembled outside parliament late Monday in a protest reminiscent of the popular protests that early 2009 contributed to the resignation of a previous government in the wake of the global financial crisis.
A new protest was planned late Tuesday.
The Panama-based law firm at the centre of a massive data leak earlier rejected wrongdoing.
"These reports rely on supposition and stereotypes, and play on the public's lack of familiarity with the work of firms like ours," Panama-based law firm Mossack Fonseca said late Monday.
Accusations have also been levelled at members of Russian President Vladimir Putin's inner circle among many other public figures.
In a four-page document, law firm Mossack Fonseca reiterated that it had "never been accused or charged in connection with criminal wrongdoing," following the leak of millions of documents to the German daily Sueddeutsche Zeitung. The publication of the data also reignited the debate over how the world's wealthy make use of tax-avoidance schemes not available to most of the world's population. The firm set up offshore companies for clients for "a variety of legitimate reasons, including conducting cross-border mergers and acquisitions, bankruptcies, estate planning, personal safety, and restructurings and pooling of investment capital from investors residing in different jurisdictions who want a neutral legal and tax regime that does not benefit or disadvantage any one investor," Mossack Fonseca said. China Tuesday blocked access to the Panama papers on the website of the International Consortium of Investigative Journalists (ICIJ), which was 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. The brother-in-law of Chinese President Xi Jinping and family members of at least eight current and former members of the politburo standing committee were named as having set up offshore companies through Mossack Fonseca.
The so-called Panama Papers, which disclosed the activities of 214,000 purported shell companies, were obtained by Sueddeutsche, which has said the employee who leaked the documents was risking his life.
The chief executive of Nordic banking group Nordea, Casper von Koskull, told Swedish television late Monday it would terminate all cooperation with the Panama-based firm.
Nordea did not condone tax evasion, he said.
Leaked documents published in Nordic media suggested Nordea International Private Banking in Luxembourg had helped wealthy customers set up companies in tax havens.