Country is facing second snap election in a year after party in ruling coalition quits over alleged cover-up involving PM’s father

Iceland will face its second snap election in a year after one of the three parties in its ruling coalition said it was quitting because of a “serious breach of trust” over the alleged cover-up of a scandal involving the prime minister’s father.

The Bright Future party said on its Facebook page that it had “decided to terminate cooperation with the government”, effectively bringing down Bjarni Benediktsson’s administration barely nine months after it was formed.

The prime minister told reporters: “We have lost the majority and I don’t see anything that indicates we can regain that … I am calling an election.” He added that he would prefer the vote to take place in November.

The walkout follows reports that Benediktsson’s Independence party tried to conceal a letter written by his father, Benedikt Sveinsson, to help a friend convicted of child sexual offences have his criminal record cleared.

The justice minister, Sigridur Andersen, of the Independence party, told Benediktsson of the letter in July but the government did not publicly disclose its existence until forced to do so by a parliamentary committee this week.

Sveinsson’s letter recommended that his friend Hjalti Sigurjón Hauksson, sentenced to five years in prison in 2004 for repeatedly raping his stepdaughter for 12 years since the age of five, should have his “honour restored”.

The widely criticised Icelandic legal procedure restores the “civil standing” of people who have served sentences for serious offences – allowing them, for example, to apply for certain jobs – without erasing their criminal records. One requirement for the status is a letter of recommendation from a close friend.

The Reform party, the third member of the coalition formed after elections last year, triggered by the collapse of the previous government following the Panama Papers offshore tax revelations, also said it backed a fresh vote.

“In light of the situation, the Reform party believes the right thing to do is to call an election immediately,” it said in a statement.

Bright Future’s chair, Guðlaug Kristjánsdóttir, called the latest scandal “the last straw”.

Sveinsson confirmed on Friday that he had signed a letter supporting his friend’s application and said he had not discussed it with anyone. “I did not think of it as something that would justify Hjalti’s position,” he said. “I never considered ‘restored honour’ as anything but a legal procedure making it possible for convicted criminals to regain some civil rights.”

Sveinsson added: “I would like to apologise to all those who have been hurt because of the matter.”