In a letter of resignation submitted to Prime Minister Sheikh Nasser Mohammed al-Ahmed al-Sabah, the cabinet appears to blame its resignation on the deteriorating relationship between the government and the National Assembly (parliament).

“There has been disorder in the relationship between the government and the National Assembly and a deviation in the concept of parliamentary representation,” the letter says. “This is evident from what we have lately witnessed in attempts to undermine our national unity, in addition to practices of creating crises and violating parliamentary norms.”

The mass resignation occurred just days before parliament was due to hold a debate on increasing public sector workers' pay by KD50 ($185) a month. The government had already agreed to a KD120 ($444) a month pay rise in February and was resisting any further wage increase, saying it would put undue pressure on the state's budget.

The government of Sheikh Nasser has faced intense criticism since its formation in 2006.

The legislature, which is dominated by opposition politicians, has voiced its disapproval of the government's performance, and has forced the resignation of several ministers, including two oil ministers.

However, the mass resignation came as a surprise as relations between the executive and parliament had appeared to improve in recent months.

The passing of tax and build-operate-transfer laws, and support from the Sunni-dominated parliament for a government clampdown on Shia protests had given hope for an era of co-operation.

“Sheikh Nasser has been targeted since he came to power,” says Mustafa Alani, senior adviser and director of security at the Dubai-based Gulf Research Centre. “Now, with the sectarian problem, he has been accused of not being able to handle the situation.”

What happens now depends on Emir Sheikh Sabah al-Ahmed al-Sabah, who has the final say in the state's politics. He rushed back from a visit to Morocco on 18 March to deal with the situation.

He has two main options: he can reappoint the prime minister and cabinet, making some cosmetic changes to ministerial portfolios; or he can dissolve parliament and call for fresh elections.

Analysts say the latter is more likely, as simply reappointing Sheikh Nasser will not solve the problem.

However, fresh elections are likely to strengthen the opposition in parliament as they will be held under the recent election law, which reduced the power of the tribal vote that has often been seen as pro-government.

This could create further difficulties. The state has largely failed to push ahead with vital reforms of the economy and its oil sector in recent years because of the political impasse.