Mark Rutte's government has stepped down after thousands of families were wrongly accused of child welfare fraud and told to pay money back.

Families suffered an "unparalleled wrong", Dutch MPs decided, with tax officials, politicians, judges and civil servants leaving them powerless.

Many of those affected were from an immigrant background and hundreds were plunged into financial difficulty.

Mr Rutte submitted the cabinet's resignation to the king.

"Innocent people have been criminalised and their lives ruined," he then told reporters, adding that responsibility for what had gone wrong lay with the cabinet. "The buck stops here."

The "unanimous" decision, taken at a cabinet meeting in The Hague, comes at a key moment in the Covid-19 pandemic.

The Netherlands has gone into lockdown and ministers have been considering stiffer measures to halt the spread of infection.

The government will stay on in a caretaker role to tackle the pandemic until parliamentary elections in March but Economics Minister Eric Wiebes has quit with immediate effect for his role in the scandal. Asked whether the cabinet's resignation was merely symbolic, Mr Rutte was adamant that it was not.

This is not the first time a Dutch government has resigned en masse in a gesture of collective responsibility. In 2002, the cabinet stood down after a report criticised ministers and the military for failing to prevent the massacre of Muslims at Srebrenica during the Bosnian war seven years earlier.