Hours after being tapped as Sweden’s prime minister, Magdalena Andersson resigned after suffering a budget defeat in parliament and coalition partner the Greens left the two-party minority government.
"For me, it is about respect, but I also do not want to lead a government where there may be grounds to question its legitimacy," Andersson told a news conference.
Andersson has informed parliamentary Speaker Anderas Norlen that she is still interested in leading a Social Democratic one-party government.
She said that "a coalition government should resign if a party chooses to leave the government. Despite the fact that the parliamentary situation is unchanged, it needs to be tried again".
The speaker of Sweden’s 349-seat parliament, Andreas Norlen, said he had received Andersson's resignation and will contact the party leaders "to discuss the situation". the Swedish news agency TT said.
It is expected he will later announce the road ahead.
The government’s own budget proposal was rejected in favour of one presented by the opposition that includes the right-wing populist Sweden Democrats. Sweden’s third-largest party is rooted in a neo-Nazi movement.
"Now the government has voted for a budget that has been negotiated by a right-wing extremist party," Green Party spokesperson Per Bolund said.
"That is something we deeply regret."
Earlier, Andersson had said she could "govern the country with the opposition’s budget".
"We have a united party behind us saying we can not sit in government that implements a policy (the Sweden Democrats) negotiated. We must look our voters in the eye and feel pride," said Marta Stenevi, the Greens’ other spokesperson as the party chose to resign from the government.
The party said it is prepared to stand behind Andersson in a new vote to tap a prime minister. It was unclear what the dramatic development would lead to.
The approved budget was based on the government’s own proposal but of the 74 billion kronor (NZ$11.8 billion) that the government wanted to spend on reforms, just over 20 billion kronor (NZ$3.2 billion) will be redistributed next year, Swedish broadcaster SVT said.
The approved budget aims at reducing taxes, increased salaries for police officers and more money to different sectors of Sweden’s judiciary system.
Andersson's appointment as prime minister had marked a milestone for Sweden, viewed for decades as one of Europe’s most progressive countries when it comes to gender relations, but which had yet to have a woman in the top political post.
Andersson had been tapped to replace Stefan Lofven as party leader and prime minister, roles he relinquished earlier this year.
In the 349-seat Riksdag earlier, 117 lawmakers voted yes to Andersson, 174 rejected her appointment while 57 abstained and one lawmaker was absent.
Under the Swedish Constitution, prime ministers can be named and govern as long as a parliamentary majority — a minimum of 175 lawmakers — is not against them.
Sweden’s next general election is scheduled for September 11.