The Tongan government says former Attorney-General John Cauchi frequently tested its patience by interfering in matters that were not his business.
Mr Cauchi resigned on Friday citing political interference by the government, including the first direct appointment of a judge without his advice.
In a statement, the government says that the powers granted to Mr Cauchi when he was appointed nearly a year ago proved beyond his abilities. It says the dignity of the office of Attorney-General is degraded by inappropriate activism.
A member of the Tongan Parliament, Akilisi Pohiva, says the resignation is a setback for Tongan democracy; and Tongan Advisory Council chairman Melino Maka says the whole situation will make the government look foolish to the international community.
Auckland University law professor Bill Hodge says that if the judiciary is not independent, Tonga will be compared to Fiji where the military government appoints the judges.
NZ, Australia 'should question' continued funding
Mr Cauchi says the government effectively removed most of his responsibilities and compromised the independence of the judiciary.
Tonga's progress toward democracy and a free and fair society seems to have stopped, he says, and New Zealand and Australia should question whether they should continue to provide funding for Tonga's judicial system.
It was incompatible with accepted constitutional practice that the appointment of the judge was made without the recommendation of the Judicial Services Commission, he says.
Mr Cauchi also says that the Government's decision to repeal the Judicial Services Commission Act will destroy the independence of the Tongan judiciary, and that Cabinet's decision not to support independent prosecutors over the sinking of the ferry Princess Ashika on funding grounds is spurious.