Reuters International

Iceland's Prime Minister Sigmundur David Gunnlaugsson attends a news conference in Stockholm, Sweden, in this June 19, 2013 file photo. REUTERS/Bertil Enevag Ericson/Scanpix/Files

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REYKJAVIK (Reuters) - Iceland Prime Minister Sigmundur David Gunnlaugsson will step down, the deputy head of his party said on Tuesday, after leaked files showed the premier's wife owned an offshore firm with big claims on Iceland's collapsed banks.

Sigurdur Ingi Johannsson, who is also currently minister of fisheries and agriculture, told reporters that the progressive party will suggest to its coalition partners in the Independence Party that he should become the new prime minister.

Earlier in the day, Gunnlaugsson asked Iceland's president to dissolve parliament in the face of a looming no-confidence vote and protests over the "Panama Papers", a leaked trove of documents revealing the financial arrangements of politicians and public figures from around the world.

(Reporting by Ragnhildur Sigurdardottir; Editing by Mark Heinrich)

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