Last Updated | 6:33 p.m. ICELAND’S PRIME MINISTER , Sigmundur Davíð Gunnlaugsson, resigned on Tuesday, becoming the first leader to be forced from office over the secret financial dealings revealed by the Panama Papers leak.

The prime minister, who was elected to parliament as a reformer in 2009, promising transparency following the ruinous collapse of three Icelandic banks the year before, failed to disclose that his family secretly held bonds worth millions of dollars in the same banks, through a shell company in the British Virgin Islands. Gunnlaugsson told members of his Progressive Party that he would be replaced by the minister of fisheries, Sigurður Ingi Jóhannesson, according to Reykjavik Media, a local investigative site whose founder, Jóhannes Kr. Kristjánsson, confronted the prime minister during an on-camera interview broadcast on Sunday.

The moment Iceland’s prime minister walked out of an interview because of a tax haven question #panamapapershttps://t.co/FfWj8jiQec — The Guardian (@guardian) April 4, 2016

Gunnlaugsson plans to remain as the party leader and wants to keep his seat in parliament. As The Intercept reported on Monday, more than 20,000 protesters massed outside Iceland’s parliament, the Althing, on Monday to demand new elections. (Reykjavik Media shared remarkable aerial video of that crowd on Facebook.) The ruling coalition, however, is trying to avoid fresh elections at all costs, no doubt because it already trailed the insurgent Pirate Party in opinion polls before the revelation that the prime minister, and other senior members of his government, held secret offshore accounts. As Süddeutsche Zeitung reported, the documents leaked to the German newspaper by an unnamed whistleblower in Mossack Fonseca showed that the Panamanian firm had also set up offshore accounts for Iceland’s finance minister, Bjarni Benediktsson, and the interior minister, Ólöf Nordal. Ahead of another protest planned for Tuesday evening, Benediktsson said he had no intention of resigning, according to Ásta Helgadóttir, a member of parliament for the Pirate Party, and Sigridur Tulinius, a law student.









Finance Minister wants the coalition to continue #Panamapapers — Sigridur Tulinius (@sigridurtul) April 5, 2016





Iceland is still in capital controls while 3 of the ministers in its Government have offshore companies in tax havens #Panamapapers — Sigridur Tulinius (@sigridurtul) April 5, 2016

The chaotic handling of the affair baffled and infuriated many in Iceland, who vented their anger online using the hashtag #cashljós, which is a pun based on the name of the television program that aired the prime minister’s disastrous interview, Kastljós — the Icelandic word for “spotlight.”









Although a smaller number of protesters massed outside the Althing later on Tuesday, opposition parties, including the Pirates, pressed their demand for elections to resolve the crisis.











In a strange coda to a turbulent day, on Tuesday evening, Sig­urður Már Jóns­son, the government’s press secretary, sent an email to foreign journalists, including Richard Milne on the Financial Times, in which he argued that the Gunnlaugsson “has not resigned,” but merely “suggested” that the fisheries minister “take over the office of Prime Minister for an unspecified amount of time.”

What a bonkers day in Iceland. PM resigns, only for PR to claim he didn't. PM and president basically accuse each other of lying. And tmw? — Richard Milne (@rmilneNordic) April 5, 2016





Here's the full email from Iceland's government PR claiming prime minister did not in fact resign pic.twitter.com/4bap04OZBY — Richard Milne (@rmilneNordic) April 5, 2016

Gunnlaugsson is far from the only world leader tied to secret offshore companies by the documents. As The Guardian reports, on Tuesday, British Prime Minister David Cameron “ducked a question about whether his family stands to benefit from offshore assets linked to his late father,” telling Faisal Islam of Sky News that he, personally, has no such accounts.