Immigration Minister Rita Verdonk is known for her hardline stance

D66, the coalition's smallest member, withdrew its support in a row over Immigration Minister Rita Verdonk.

Ms Verdonk had threatened to strip former politician Ayaan Hirsi Ali of her Dutch passport because of false information she gave in 1992.

Mr Balkenende said he would tender the government's resignation on Friday.

"Following this, the remaining ministers and junior ministers decided to tender their positions to the head of state, the Queen. This also counts for me, the prime minister," Mr Balkenende said on television.

U-turn

Mr Balkenende's announcement came after two days of debate in the parliament, where Ms Verdonk had done a U-turn on her stance on Ms Hirsi Ali, claiming she had found a legal loophole that would allow the Somali-born woman to stay.

The D66 party pulled three ministers from the government because Ms Verdonk, known as "Iron Rita" for her tough stance on immigration issues, refused to resign over her treatment of Ms Hirsi Ali.

"A rift was created with my party and I feel there is no other way but to withdraw support for this government," D66 party leader Lousewies van der Laan told parliament today.

Ms Hirsi Ali, 36, became an international figure after writing a controversial film about the treatment of women in Islam, which was directed by Theo Van Gogh, later led to his murder by a Muslim extremist in 2004.

Since admitting to lying in her asylum application, Ms Hirsi Ali has stepped down as a member of parliament and planned a move to the US to work for a think tank.

The resignation of the government could lead to new elections in October.