The political turmoil accelerated a day after Ireland requested a bailout from the European Union and IMF, likely to be worth around 80 billion euros, to shore up its banks and budget against the effects of the global credit crunch.
"What is needed now is an immediate general election so that a new government, with a clear parliamentary majority, can prepare the four-year economic plan, complete negotiations with the EU and IMF and frame a budget for 2011," Fine Gael leader Enda Kenny said in an emailed statement.
His comments came after two independent members of parliament on whom Prime Minister Brian Cowen's government relies for support said they may withhold support from the 2011 budget due to be unveiled on December 7, effectively depriving the government of a working majority.
The challenge by Jackie Healy-Rae and Michael Lowry left Cowen's package of 6 billion euros of spending cuts and tax rises, a pillar of a four-year austerity programme that will be key to the EU and IMF bailout, in jeopardy.
Lowry said he would support the 2011 budget only if the main opposition parties, Fine Gael and Labour, had a role in devising it. Healy-Rae also said he might withhold support. This would leave the budget needing the support of opposition parties.
But public anger towards the government over its handling of the crisis has reached boiling point, and the opposition parties certain to benefit from an early election showed no sign of being ready to help.
The government is expected to announce on Wednesday that it will cut the minimum wage, slash social welfare spending, reduce the number of public employees and add a new property tax and higher income taxes.
Labour also called for parliament to be dissolved immediately. The minimum period needed to organise an election is three weeks.
"It is essential that we have a new government elected as soon as possible," Labour leader Eamon Gilmore said in a statement published on the party's website.
"My preference would be for a dissolution of the Dail (parliament) today and the holding of a general election at the earliest possible date provided for under law. This would allow the election of a new government by the middle of December."
Cowen's own coalition partner, the Green Party, said earlier on Monday it would support the government until the budget had been passed and the EU/IMF bailout was in place, but then quit the coalition. It called for an election in January.
"We have now reached a point where the Irish people need political certainty to take them beyond the coming two months. So, we believe it is time to fix a date for a general election in the second half of January," the Greens said in a statement.
"I regret very much that the country is in the hands of the IMF and I and my colleagues are deeply upset by what has happened, but we believe that we had to stay in government at all times to act in the national interest," Green Party leader John Gormley told a news conference. His party is expected to be all but wiped out at the next election.
Cowen said the government's four-year economic plan, to be announced on Wednesday, would involve 10 billion euros in public spending cuts and 5 billion euros in tax rises, on top of two years of harsh austerity and recession already endured.
Unions have warned this could spark civil unrest: a student demonstration over planned fee increases turned violent earlier this month, and unions have organised a march to protest at the planned austerity measures on November (Stuttgart: A0Z24E - news) 27 in Dublin.
The Socialist party Sinn Fein organised a demonstration outside parliament on Monday. About 50 people shouted "Cowen, Cowen, Cowen. Out, out, out!"
(Editing by Kevin Liffey)