(Adds resignation accepted by president, background)
BISHKEK, April 11 (Reuters) - Kyrgyz Prime Minister Temir Sariyev and his cabinet resigned on Monday after a parliamentary commission accused it of corruption, a move highlighting tensions between different factions of President Almazbek Atambayev's supporters.
"Squabbles, rumours and gossip have upset the balance within the government," Sariyev told a cabinet meeting open to the media. "The government's work has stalled at such a difficult time."
A commission set up by the ex-Soviet republic's parliament said last week the government had broken the law, accusing it of having rigged a $100 million road construction tender to ensure it was given to a Chinese firm that lacked the required license.
Sariyev, who has denied any wrongdoing, had asked Atambayev to sack Transport Minister Argynbek Malabayev, but the president has refused to do so, saying the prime minister had not provided clear legal grounds for a dismissal.
On Monday, Atambayev accepted Sariyev's resignation, which automatically triggered the resignation of the whole cabinet.
Sariyev, 52, has run the Central Asian nation's government since last May, at the time when its economy has come under pressure from the recession in Russia and slowdowns in other neighbouring countries such as China and Kazakhstan.
Sariyev had also pledged to resolve a long-standing dispute over profit-sharing with Canada's Centerra Gold, which operates Kumtor, Kyrgyzstan's biggest gold mine and its economic backbone. But the sides have not reached any agreement yet.
Social Democrats closely linked to Atambayev head up a coalition that dominates the parliament and also includes the Kyrgyzstan, Onuguu-Progress and Ata Meken parties. Sariyev's party, Akshumkar, does not have seats in the parliament.
The coalition, which controls 80 out of 120 seats in the legislature, now needs to pick a new premier within 15 days.
Unlike its autocratic Central Asian neighbours, Kyrgyzstan has a relatively powerful parliament while limiting presidential powers. Two Kyrgyz presidents have been toppled by violent protests. (Reporting by Olga Dzyubenko; Writing by Olzhas Auyezov; Editing by Mark Heinrich)