Finnish Prime Minister Juha Sipila says his coalition can no longer go on with the Eurosceptic Finns party, after it elected an anti-immigration hardliner as leader.
Jussi Halla-aho has been convicted of hate speech for anti-Islamic and anti-Somali comments on his blog.
His two partners in the ruling coalition said conditions were not right to work with the nationalists.
Opposition parties want a snap election but that is not expected at this stage.
The three-party coalition came to power in 2015, bringing the Finns into government for the first time as the second biggest party.
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