Iceland's prime minister on Tuesday threatened to dissolve parliament and call new elections if he were to lose the support of his junior coalition partner following an uproar over his offshore holdings revealed in the "Panama Papers".

"I told the leader of the Independence Party that if the party's parliamentarians think they can not support the government in completing joint tasks, I would dissolve parliament and call a general election," Prime Minister Sigmundur David Gunnlaugsson wrote on his Facebook page.