Pakistan's dominant political force in its biggest city of Karachi said on Monday its two ministers in the federal cabinet would resign.
The announcement by the MQM comes just days after the Jamiat-e-Ulema-e-Islam (JUI), a small coalition partner of the government, pulled out of the ruling coalition after the dismissal of one of its members as a minister.
The Muttahida Qaumi Movement said in a statement that the ministers' resignations were a first step and a decision on whether to stay part of the federal as well as the provincial Sindh government would be taken soon.
The MQM cited corruption, law and order and rising prices amongst the reasons for the decisions to leave the cabinet.
"As a first step, it has been decided that both our federal ministers are leaving the cabinet and their resignations will be sent to Prime Minister Yusuf Raza Gilani soon," the party said.
"As far as the decision to part ways with the federal government and the future relationship with the provincial government is concerned, a decision will be taken soon."
The MQM has been an uneasy partner for the government and has repeatedly threatened to pull out of the coalition government of President Asif Ali Zardari's Pakistan People's Party.
If it does leave the government, the move could cost the coalition its National Assembly majority, or its downfall if the MQM sides with the opposition.
The coalition holds 181 out of 342 seats in parliament, nine more than the 172 needed to maintain its majority. This includes 25 members from the MQM.