A protest party in Iceland promoting direct democracy, 35-hour working weeks and total drug decriminalisation are the largest political party in the country with just four months to go until the general election, according to a new poll.

The Pirate Party founded by a group of activists, poets and hackers in 2012 is now polling at 29.9 per cent, according to the new survey conducted by the Social Science Research Institute of the University of Iceland.

The result marks a 1.6 per cent rise for the party since the country's last poll, according to Iceland Monitor.

The centre-right Independence Party is the second largest party, according to the poll, with 22.7 per cent, a fall of 5.5 per cent since May.

On Monday, the Pirate Party announced it would be holding primary elections for parliamentary candidates in every constituency in Iceland ahead of the elections, Iceland Monitor reports.

A Pirate Party flag at a rally in Reykjavik following the Prime Minister's implication in tax evasion via the Panama Papers (HALLDOR KOLBEINS/AFP/Getty Images) (Getty)

Currently the party has just three MPs in Iceland's 63-seat parliament. However, after topping opinion polls for almost a year the party look set to form a crucial part of a coalition government in this autumn's general election.

The radical party does not nominally have a leader, however former Wikileaks spokeswoman and now founding MP Birgitta Jonsdottir tends to speak for it in public.

“We are really excited about the future and look forward to taking ourselves to the nation in the upcoming elections,” said Ms Jonsdottir during general party meeting over the weekend.

Previously speaking about the party’s surge in the polls she told the Australian Financial Review: “I don't think there's any one explanation for our popularity.

"People are obviously tired of being promised the world ahead of elections, only to see political parties negotiate among themselves and back away from their promises.”

She added that the party were also realistic that its popularity in the polls may not equate to votes in the next parliamentary elections. “That’s too optimistic. But our support has forced other parties to take a closer look at themselves," she said.

Iceland’s general election had previously been scheduled to take place in April 2017, however following political unrest over PM Sigmundur David Gunnlaugsson’s connections to the Panama Papers it is now due to take place this autumn.