The Dutch government has resigned after failing to agree a package of austerity measures with its far-right partners.
Prime Minister Mark Rutte, who had been under pressure for weeks, tendered his Cabinet's resignation to Queen Beatrix at her palace in the Hague.
The move had been widely expected since the weekend when Mr Rutte acknowledged a rift with Geert Wilders' Freedom Party.
Although not part of the ruling coalition, Wilders' party had effectively guaranteed the government's majority for the last 18 months by agreeing to support it in parliament.
The arrangement came to an abrupt halt on Saturday when talks on further spending cuts foundered.
Mr Rutte's liberal VVD party, its coalition partner the Christian Democrats and Wilders' Freedom Party had been negotiating on a near-daily basis for seven weeks when Wilders walked out of the talks.
The turmoil has raised fears that the Netherlands' triple A credit rating could be in danger. It is one of only four eurozone countries to retain that status among the three main credit rating agencies.
The three parties had been holding almost daily discussions in a bid to reach agreement on how to cut 16 billion euros (£13.09bn) from the budget, which stood at 4.7% of gross domestic product for 2011.
The EU's deficit ceiling is 3% of GDP.
The talks had been in their final stages when Mr Wilders dropped his bombshell. A visibly upset Mr Rutte said early elections, otherwise due in May 2015, were now a strong possibility.
The austerity package at the centre of the row included a slight raise in VAT, a freeze on civil servants' wages and a cut in spending in both the health and development aid sectors.
"The plan is not in the interest of (Freedom Party) voters," Mr Wilders told a press conference. "We cannot live up to the demands Brussels is putting on us. Money is being taken from the wallets of pensioners."
Mr Rutte came to power in October 2010 after the fall of the then prime minister Jan Peter Balkenende in a dispute over continued military support to Nato forces in Afghanistan.
Eurosceptic Mr Wilders' support had ensured Mr Rutte's coalition held a one-seat majority in the 150-seat parliament up until March 21 when one of its deputies resigned.
Sky News
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