The Queen's Representative in the Cook Islands has dissolved parliament and called new elections.
Sir Frederick Goodwin made a speech to the nation on local radio this morning to announce his decision after a by-election moved the balance of power in favour of the opposition by one vote.
A spokesman for the Prime Minister says that under the constitution, a caretaker government can run the country without a budget being passed for ninety days from the beginning of July.
That means general elections must be held before October.
Despite being dissolved, parliament sat briefly at this morning, as directed by the Queens Representative, to deal with the budget.
But only the speaker and 12 opposition MPs attended.
The Clerk of Parliament, Nga Valoa, outlines what happened:
"Parliament went ahead with the Speaker in the Chair and a motion of no confidence in the Prime Minister, Jim Marurai, was put and then a motion of confidence in Sir Geoffrey Henry as the new Prime Minister."
Nga Valoa says Jim Marurai remains Prime Minister in a caretaker role, despite the vote this morning, as parliament had been dissolved before the sitting.