The Dutch government has resigned two months before elections over a child benefits scandal that has rocked the country’s political establishment.

Mark Rutte, prime minister of the Netherlands, announced his four-party coalition would be stepping down after an emergency cabinet meeting on Friday. The move was expected after the government had come under pressure to take responsibility for a child benefits scandal in which thousands of Dutch families were falsely accused of defrauding the state, forcing them to repay money owed to them and having their benefits stopped.

The cabinet resignation is a largely symbolic move ahead of national elections on March 17, where Mr Rutte is vying to lead his fourth government after 11 years in office. It will mean the Netherlands will have a caretaker government led by Mr Rutte, with the tacit support of opposition parties, to continue steering the country during the pandemic.

“The rule of law must protect the citizens against an almighty government and that has gone horribly wrong here”, Mr Rutte said at a press conference following the cabinet meeting. He criticised mistakes “throughout the police, administrative and legal system”. Mr Rutte will formally hand his resignation to the king later on Friday.

A parliamentary report in December issued scathing findings on how government tax officials hunted down thousands of parents wrongly accused of defrauding the child welfare system over the past seven years. The tax ministry has also been accused of racial profiling, after it was found that officials targeted families who held dual nationality, forcing many into financial ruin.

The ministry last year apologised for the errors and set up a €500m fund to help compensate about 10,000 families who lost payments, often for minor administrative errors such as missing signatures on forms.

A government resignation was all but inevitable after Lodewijk Asscher, leader of the Dutch opposition Labour party and former social affairs minister in the last government, resigned this week. That paved the way for the cabinet to take collective responsibility to prevent further ministerial resignations.

Finance minister Wopke Hoekstra, tax minister Eric Weibes and medical affairs minister Tamara van Ark are also the subject of court action from 20 families who have started legal proceedings against the government. Mr Weibes on Friday said he would not return to serve in the caretaker government.

Jesse Klaver, leader of the Dutch Green party, said the resignation was a “moment of justice” and should mark a turning point “so we can rebuild our welfare state again”.

Mr Rutte, a veteran prime minister and consummate political survivor, is expected to weather the crisis and lead his centre-right Freedom party to victory in March, according to the polls. The 53-year-old has come under fire for largely reversing a so-called “intelligent lockdown” strategy to quell rising infections in late 2020.

The government’s fall is unlikely to derail the Netherlands’ ratification of the EU recovery fund, which will need to be passed by both houses of parliament in the coming weeks. Mr Rutte’s coalition lost its slim majority in the lower house last year, but Brussels’ borrowing plan will win support from centre-left and Green MPs.