Iceland's PM says he won't resign in Panama Papers scandal

Iceland's prime minister told parliament Monday he will not resign even as thousands of angry protesters demanded he step down and call new elections because of leaked documents that raised questions about his financial affairs.

The leaked documents have sparked a media investigation of possible links to an offshore company that could represent a serious conflict of interest.

"I have not considered quitting because of this matter nor am I going to quit because of this matter," a defiant Sigmundur David Gunnlaugsson told parliament. "The government has had good results. Progress has been strong and it is important that the government can finish its work."

He left the building as protesters gathered outside. Police estimated the crowd at 8,000 people – a throng called by duty officer Arnar Runar Marteinsson the largest protest he had ever seen in Reykjavik.

Participants blew whistles, banged pots and pans, set off fireworks, and stomped the barricades separating the protest site from the parliament building. The sound was deafening and reminiscent of the sustained protests in 2008 and 2009 that led to the fall of the government after a financial collapse crippled the island nation.

"There is no other choice but for the prime minister to go," said Gudrun Jonsdottir, a teacher in Reykjavik. "The people of Iceland will not tolerate this corrupt government. You can hear how angry we are."

News reports have alleged that Mr. Gunnlaugsson and his wife set up a company in the British Virgin Islands with the help of a Panamanian law firm at the center of a massive tax evasion leak. The reports have prompted calls for a no-confidence vote in parliament against him.

He told parliament he and his wife have paid all their taxes in full and he denied having assets in a tax haven. Gunnlaugsson also said there was nothing new in the information contained in the Panama Papers data leak.

A variety of opposition figures still called for him to leave office and have called for a no-confidence vote against his center-right government.

The revelation concerns the company Wintris Inc., which Gunnlaugsson allegedly created in 2007 along with his partner at the time, Anna Sigurlaug Palsdottir, who is now his wife.

He allegedly sold his half of the company to Ms. Palsdottir for $1 on Dec. 31, 2009, the day before a new Icelandic law took effect that would have required him to declare the ownership of Wintris as a conflict of interest.

Wintris lost money as a result of the 2008 financial crash that crippled Iceland, and is claiming a total of 515 million Icelandic kronur ($4.2 million) from the three failed Icelandic banks: Landsbanki, Glitnir, and Kaupthing.

Gunnlaugsson has been accused by opposition leaders of a serious conflict of interest because as prime minister he was involved in reaching a deal for the banks' claimants. Former Prime Minister Johanna Sigurdardottir called for Gunnlaugsson's resignation, as did Birgitta Jonsdottir, the popular head of the Pirate Party.

Gunnlaugsson, the head of the center-right Progressive Party, began his four-year term in 2013, five years after Iceland's financial collapse.

Iceland, a volcano-dotted North Atlantic nation with a population of 330,000, went from being an economic superstar to financial basket case almost overnight when its main commercial banks collapsed within a week of one another in 2008.