Iceland's Prime Minister Sigmundur David Gunnlaugsson has resigned, his party said on Tuesday, making him the first major political casualty to emerge from the leak of the so-called Panama Papers financial documents.

"The prime minister told [his party's] parliamentary group meeting that he would step down as prime minister and I will take over," the Progressive Party's deputy leader and Agriculture Minister Sigurdur Ingi Johannsson said.

Gunnlaugsson asked President Olafur Ragnar Grimsson - who cut short a US visit to return to Reykjavik earlier on Tuesday to deal with the crisis - to dissolve parliament, but was refused.

Refusing a request to dissolve parliament was unprecedented in Iceland, political observers said.

Gunnlaugsson, 41, has been under pressure since leaked financial documents showed that he and his wife Anna Sigurlaug Palsdottir owned an offshore company in the British Virgin Islands and had placed millions of dollars there.

Gunnlaugsson had said earlier on Tuesday he would seek the dissolution of parliament if he did not get the support of the junior coalition member Independence Party.

Finance minister and Independence Party leader Bjarni Benediktsson was also named in the Panama Papers, a massive leak of secret offshore financial dealings.

His party has not yet said whether it plans to support Gunnlaugsson.

Gunnlaugsson's company, named Wintris Inc and acquired in 2007, was intended to manage his wife's inheritance from her wealthy businessman father, according to the Panama Papers.

The prime minister sold his 50-­percent share to his wife for a symbolic sum of $1 at the end of 2009.

But when he was elected to parliament for the first time in April 2009, as a member of the center-right Progressive Party, he neglected to mention his stake in his declaration of shareholdings.

France will put Panama back on its list of countries that do not cooperate in efforts to track down tax dodgers, Finance Minister Michel Sapin said Tuesday following the leak's revelations.

"France has decided to put Panama back on the list of uncooperative countries, with all the consequences that will have for those who have transactions" with the central American state, Sapin told parliament.

Panama "wanted to have us believe that it could respect major international principles," Sapin said. "That's how it managed to avoid being on the blacklist of tax havens."

Elsewhere, the head of one of Chile's leading anti-corruption watchdogs resigned after his name appeared in the Panama Papers.

Gonzalo Delaveau, the president of Transparent Chile - the local branch of anti-graft group Transparency International - submitted his resignation on Monday after he was named as a director or representative of at least five companies registered in the Bahamas.