Iceland's Prime Minister Sigmundur Davíð Gunnlaugsson resigned on Tuesday, becoming the first high-profile casualty of the Panama Papers controversy that exposed the murky world of offshore banking, reported Agence France-Presse.

Gunnlaugsson's resignation came in the wake of a mounting political crisis in the country triggered by the Panama Papers leaks that the prime minister owned an offshore company with his wife. He was accused of concealing millions of dollars worth of family assets by not declaring an interest in the company on entering parliament in 2009. But Gunnlaugsson has insisted that no rules were broken and his wife did not benefit financially.

The accusations had resulted in massive protests outside Iceland's parliament on Monday. He had initially refused to resign. But amid mounting pressure from the opposition and even his governing coalition, Gunnlaugsson had approached the country's president Olafur Ragnar Grimsson earlier on Tuesday with a request to dissolve parliament, but was refused.

He then put in his papers but his resignation has yet to be agreed by either his coalition partners or the president – a pre-requisite for it to be official, according to local media.

Gunnlaugsson's dealings figure in the 11 million documents leaked from Panamian law firm Mossack Fonseca that expose over 214,000 offshore companies, typically used as structures to evade taxation connected to people in over 200 countries. They have essentially lifted the lid on how the rich and powerful use tax havens to hide their wealth.