Iceland's Commerce Minister Bjorgvin Sigurdsson announced his decision on Sunday to quit the coalition government, news reports from Reykjavik said.
"I have decided to do this to take responsibility" for the economic collapse in the country, Sigurdsson was quoted as saying at a press conference.
The anger and mistrust among the public were too deep to win back their support for the government, he said.
Sigurdsson, a member of the junior Social Democrat coalition party, also urged the head of the country's financial supervisory authority to resign.
Sigurdsson's resignation came two days after Prime Minister Geir Haarde called for early national elections and announced that he would not stand for re-election.
Haarde said at a news conference on Friday that a general election should be held this May to find his replacement.
He also revealed that he had been diagnosed with cancer and would not seek re-election as leader of the Independence Party at its upcoming national congress before the general election.
The next general election is to take place in 2011, but Haarde has been under increasing pressure to advance the election as a result of the country's ongoing economic crisis.
Iceland's economy is expected to decrease by 10 percent in 2009 following the collapse of the country's currency and financial system last October.
On Saturday, thousands of people gathered outside the parliament building to protest against the government's handling of the economy -- the 16th consecutive weekend demonstration to beheld in the capital. Protesters called on Haarde's governing coalition to quit immediately and demanded changes in the leadership of the central bank and financial regulators.
(Xinhua News Agency January 26, 2009)