Ukraine's prime minister has resigned in protest at the collapse of the ruling coalition and a parliamentary schism that has hurt the nation's fight against pro-Russian rebels.

"I announce my resignation in connection with the dissolution of the parliamentary coalition and the blocking of government initiatives," Arseniy Yatsenyuk said on Thursday.

"The coalition has fallen apart, laws haven’t been voted on, soldiers can’t be paid, there’s no money to buy rifles, there’s no possibility to store up fuel," Yatsenyuk told parliament. “What options do we have now?”

Several parties had earlier withdrawn from the majority European Choice coalition. They included the pro-European Udar party of former boxing champion Vitali Klitschko and the Fatherland group of ex-prime minister Yulia Tymoshenko.

Oleksandr Turchynov, the speaker, announced the formal dissolution of the ruling coalition, giving president Petro Poroshenko the right over the next month to announce fresh elections.

Al Jazeera's Peter Sharp, reporting from Kiev, said that the prime minister has been "badly frustrated" for weeks for the parliament's "inability" to make amendments on a new budget.

Yatsekyuk did not want to negotiate a new coalition with sympathisers of the pro-Russian former president Viktor Yanukovich, our correspondent said.

Early parliamentary elections in Ukraine have been expected since the February removal of the Kremlin-backed Yanukovich following months of deadly protests.

The country was previously due to hold a vote in 2017.

Poroshenko - who was elected in May after constitutional changes handed more powers to parliament - said that the deputies were recognising a groundswell of popular opinion that a new set of politicians should be chosen.

"All public opinion polls, as well as direct contact with people, shows that the public wants a complete overhaul of those in power," Poroshenko said in a statement.

He pledged though that the possibility of upcoming elections would not paralyse the work of parliament at a time when Kiev is struggling to end a bloody separatist insurrection tearing apart the east of the country.

Ukraine also disbanded the country's Communist Party on Thursday, at the request of the government.