Norway's populist Progress Party has pulled out of the centre-right governing coalition, over the decision to repatriate an Islamic State-linked woman and her two children from a detention camp in Syria.

Key points: The resignation robs Prime Minister Erna Solberg of her parliamentary majority, which could make the country more difficult to govern

The resignation robs Prime Minister Erna Solberg of her parliamentary majority, which could make the country more difficult to govern Ms Solberg said a majority in the Government believed that concern for the woman's sick child was "paramount"

Ms Solberg said a majority in the Government believed that concern for the woman's sick child was "paramount" The IS-linked woman was arrested on her return to Norway and placed in an Oslo hospital with her children

Finance minister Siv Jensen announced the move to resign at a press conference on Monday (local time), adding that there had been "too many compromises" for her populist party.

"I brought us into government, and I'm now bringing the party out," Ms Jensen told the press conference.

Ms Jensen said that "the cup is now full" after the decision to allow the woman to return to Norway, on which her anti-immigration party felt it was not consulted.

The resignation robs Conservative Prime Minister Erna Solberg of her parliamentary majority and could make the country more difficult to govern, but Ms Solberg still plans to remain in office as head of a minority coalition.

Prime Minister Erna Solberg will have to govern with a parliamentary minority. ( NTB via Reuters: Scanpix/Terje Bendiksby )

Norway's constitution does not allow early elections, and the next vote for parliament will take place in September 2021.

Ms Solberg has been prime minister of the Scandinavian country since 2013 when she formed a coalition with the Progress Party. The parties won renewed support in 2017 elections.

'Used child as a shield'

To stay in office until then and pass legislation in the 169-seat parliament, Ms Solberg needs the support of parties outside the Government, including the Progress Party.

Ms Jensen's departure was triggered by the decision announced last week that an IS-linked woman and her two children would receive help to return to Norway from Syria so that one of the children could receive medical treatment.

The 29-year-old Norwegian woman of Pakistani descent reportedly travelled to Syria in 2013 and married a Norwegian foreign fighter there, who was later killed in fighting.

The woman was formally arrested on Saturday upon her return, on suspicion of being a member of the Islamist militant group that briefly controlled a territory the size of Britain across Iraq and Syria, and was placed in an Oslo hospital with both children.

While Progress had offered to help the children, the populist party sought to deny any government assistance for adults seeking to return home after joining Islamist groups abroad or marrying foreign fighters.

Ms Jensen said many believed that the woman "used her child as a shield to come back to Norway".

"There are many … who are displeased by this, not just in the Progress Party," Ms Jensen said last week.

The Norwegian woman, who has not been named, and her two children had been detained at al-Hawl camp in Syria since March 2019. ( ABC News )

The mother refused to let the sick child travel alone to Norway, which then allowed her to travel from the Kurdish-controlled camp at al-Hawl, where all three had been detained since March 2019.

Meanwhile, Ms Solberg said "a majority in the Government believed that concern for the child was paramount."

Decisions on whether to help women with IS ties return from Syria has caused controversy in Europe, including in Finland where the recently appointed government settled on a compromise to decide each case individually.

The Norwegian woman, who has not been named, has denied the charges against her and will fully cooperate with police during interrogation, her lawyer has said.

Ms Jensen's exit, along with six other Progress cabinet ministers, leaves Ms Solberg with a string of posts to fill, including that of oil and energy minister to oversee Western Europe's biggest oil and gas industry.

At the finance ministry, the new appointee will chart the course for the world's largest sovereign wealth fund, with assets of $1.1 trillion.

Reuters/AP