Finland's government resigns as PM loses trust of coalition partner

Finnish Prime Minister Antti Rinne resigned on Tuesday after the Centre Party, a member of the governing five-party coalition, said it had lost confidence in the Social Democrat leader in the wake of a crippling postal strike.

Rinne's government has been widely criticised over its handling of a two-week strike at Finland's state postal service, Posti. The strike spread to the national airline, Finnair , and to other industries before being settled last week.

"I accept your resignation request, but at the same time I ask your cabinet to continue as a caretaker government until a new government is in place," President Sauli Niinisto told reporters assembled at the presidential residence.

The timing of the crisis is awkward. Finland holds the rotating presidency of the European Union until the end of the year, playing a central role in efforts to hammer out a new budget for the bloc.

"Losing confidence" is not a formal procedure, like a vote of no-confidence, and the Centre Party move was not directed at the Social Democrats (SDP) but specifically at Rinne.

Centre Party chairwoman Katri Kulmuni said on Monday her party wanted to remain in the coalition, but questioned Rinne's role in handling the strike.

The Centre Party is unlikely to push for a new election. It and coalition allies are trailing in the polls and could lose ground to the nationalist Finns Party. The Finns came second in last April's election, just behind Rinne's Social Democrats.

"The Centre Party and the SDP are willing to continue their cooperation and one of the main reasons why is because both parties are low in opinion polls and want to avoid a new election," Tampere University political scientist Ilkka Ruostetsaari said.

"Mr Rinne is resigning so in parliament they have to start a discussion about forming the next government ... but it is very likely that this same government coalition will continue."

Social Democrat Minister of Transportation and Communications Sanna Marin, 34, is seen as a frontrunner to replace Rinne if he steps down. She said in a tweet on Tuesday that she was heading back to Helsinki from Brussels.

"At 34 she'd be the youngest prime minister ever," Helsinki University political scientist Johanna Vuorelma said.

"The Centre Party would be happy if the prime minister stepped down and they could continue with the same government programme and coalition."

Another candidate to lead the government would be Antti Lindtman, chairman of the Social Democratic Party, said Vuorelma.