Iceland's Prime Minister Bjarni Benediktsson resigned after one of the parties in his center-right coalition administration quit over an attempt by the prime minister's father to help clear the name of a convicted paedophile. Picture: Frank Augstein/AP

London - Iceland will hold a national election on October 28 after the governing coalition collapsed amid a scandal about a proposed pardon for a sex offender.

President Gudni Th Johannesson said on Monday it was clear there was no chance of forming a new government from the existing parliament.

Prime Minister Bjarni Benediktsson resigned Saturday after one of the parties in his center-right coalition administration quit over an attempt by the prime minister's father to help clear the name of a convicted paedophile.

The centrist Bright Future party walked out after it emerged that Benediktsson's father had written a letter urging a pardon for Hjalti Sigurjon Hauksson, convicted in 2004 of raping his stepdaughter almost daily for 12 years.

The election comes a year after Iceland's last national vote, which was called after the former prime minister resigned amid protests over his offshore holdings that were revealed in the Panama Papers leak.

The 2016 election resulted in a divided parliament and led to weeks of wrangling before the formation of a three-party coalition government.

Benediktsson took office in January, uniting his Independence Party, the Reform Party and the centrists. Together they held the slimmest of majorities — 32 of the 63 seats in parliament.

Iceland is a wind-lashed island near the Arctic Circle with a population of 320,000. The country suffered through years of economic upheaval after its debt-swollen banks collapsed during the 2008 financial crisis but now is experiencing a surge in tourism by those eager to see its pristine glaciers, fjords and waterfalls and the Northern Lights.

AP