Reykjavik: Iceland will face its second snap election in about a year after the government collapsed over a scandal involving the Prime Minister's father and grants of clemency to convicted child molesters.

The Bright Future Party, one of three partners in the government coalition, abandoned Prime Minister Bjarni Benediktsson citing a "breach of trust" after accusing his party of trying to cover up a letter his father had written vouching for the character of a convicted child molester.

Bjarni Benediktsson of the Independence Party, left, shakes hands with then Iceland's Prime Minister Sigurdur Ingi Johannsson in a TV studio last year. Credit:AP

The issue has been much in the news in Iceland, where convicted paedophiles can apply for a legal "clean slate" and have their record expunged.

"That goes against our policies here at Bright Future on transparency and a good way of working," party leader Ottarr Proppe said.