Dutch Prime Minister quits after failed austerity talks

Mark Rutte, Dutch prime minister, and his cabinet have offered their resignation to Queen Beatrix after the collapse of a parliamentary partnership with a far-right party.

The Dutch government information service confirmed on Monday that Rutte had met Queen Beatrix and she had accepted his resignation, asking him to tend to pressing matters of state with a caretaker government for the time being.

His cabinet was plunged into crisis when Geert Wilders' Freedom Party (PVV) quit talks aimed at slicing 16 billion euros from the budget.Wilders refused to accept austerity demands to bring the budget deficit in line with EU rules.His party was not part of the coalition but supported the minority government.

Rutte will write to parliament later in the day offering the resignation of his cabinet, which relies on the populist Freedom Party to pass legislation, two sources told the Reuters news agency.

The resignation has been widely expected since the weekend when Rutte acknowledged that his government's rift with anti-Islam politician Geert Wilders' Freedom Party would likely lead to early elections, otherwise due in May 2015.

The Dutch economy, the eurozone's fifth largest, has survived the eurozone crisis relatively well with a national debt of around 65% of economic output but its projected budget deficit falls foul of new EU rules requiring eurozone governments to keep below 3% of GDP.

A recent forecast from the Netherlands' Central Planning Bureau estimated that the country's public deficit would rise to 4.7% of GDP.

The Netherlands has been asked to submit its budget measures to the European Commission by 30 April, although it is not clear how firm that deadline is. Since 5 March, the two coalition parties along with the Freedom Party have been trying to reach agreement on budget cuts before the deadline.

Wilders, who was said to have stormed out of talks at the last minute, said the coalition's proposals would harm economic growth and affect many people's spending power. Socialist Party leader Emile Roemer said he too was not prepared to support the attempt to bring the budget deficit below 3% by 2013.