Croatian deputy Prime Minister Tomislav Karamarko has resigned, saying the government was dysfunctional and his party - the biggest in the ruling coalition - would seek a new parliamentary majority and cabinet.

"Tomorrow we will hold a no-confidence vote against Prime Minister (Tihomir) Oreskovic as this government is dysfunctional," Karamarko, head of the conservative HDZ party, told reporters.

A state monitoring body said earlier on Wednesday that Karamarko was in a conflict of interest over his wife's business ties with a consultant of Hungary's energy group MOL. He said his resignation had nothing to do with that ruling and would seek redress in court.

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