The Latvian prime minister and his government have resigned amid growing political and economic strife in the Baltic country.

Prime Minister Ivars Godmanis submitted his resignation to the president, Valdis Zatlers, on Friday (20 February) afternoon after the two largest parties in the ruling four-party coalition demanded he step down.

The Latvian parliament: The president will seek a fresh governing coalition (Photo: Latvian parliament)

Earlier in the day, Mareks Seglins, the head of the People Party, which held the most seats in the coalition, said that his party and the Union of Greens and Farmers asked him to go.

President Zatlers has said he is to immediately start talks with all parties on the formation of a new government.

Mr Godmanis, of the Latvian Way party - the third largest within the coalition - survived a no-confidence motion in the parliament on 3 February.

The economic crisis has hit Latvia harder than most other EU states, with the country receiving a €7.5 billion emergency bail-out from the IMF and the EU.

Latvia's economy contracted by 10.5 percent year on year in the final quarter of 2008 and its GDP is expected to fall 12 percent in 2009.

The economic collapse has in turn provoked rolling civil unrest, which saw riots in the capital on 13 January and farmers in February blocked roads and surrounded government buildings, ultimately winning the resignation of the agriculture minister.

The fall of Mr Godmanis' coalition is the first European Union government to fall as a result of the economic crisis, and the second such collapse after Iceland.