Iceland's prime minister resigns as Pirate party makes significant gains in election

The election was triggered after the previous prime minister stepped down in the wake of the Panama Papers leak

Iceland's prime minister resigns as Pirate party makes significant gains in election

Iceland Prime Minister Sigurdur Ingi Johannsson. Image: Frank Augstein AP/Press Association Images

Iceland's prime minister Sigurdur Ingi Johannsson has resigned after his Progressive party saw significant losses in the country's general election.

The elections saw the Independence party - the other party in the outgoing government coalition - emerge as the largest party, winning an extra two seats (up to 21 from 19) in the 63-seat parliament.

In comparison, the Progressives dropped from 19 seats to eight.

However, the biggest gains were made by left-leaning groups. While their gains were not as large as some analysts had predicted, the Pirate party - which was only founded in 2012 - jumped from three seats to 10.

The result leaves the Pirates tied with the Left-Green party as the second largest group in parliament - which could pave the way for a left-leaning coalition government. 

The anti-establishment Pirate party has won major support from Iceland's younger voters, after corruption scandals rocked the establishment parties.

Earlier this year, Iceland's previous prime minister stepped down after the Panama Papers reportedly linked him to an offshore company.

The leaked documents were said to show Sigmundur David Gunnlaugsson and his wife owned a firm in the British Virgin Islands which held €3.4m of investments in Iceland's collapsed banks.

The revelations led to major protests in Reykjavik, and the resignation of Mr Gunnlaugsson triggered the latest election.

Discussing the results, Pirate party founder Birgitta Jonsdottir told Reuters they were 'very satisfied' with the results, explaining: "Our internal predictions showed 10 to 15%, so this is at the top of the range. We knew that we would never get 30%."

Negotiations will now get underway as the different parties attempt to form a coalition government.