MQM leader Farooq Sattar said the party, which is the largest single party in Pakistan's biggest city and has wide representation in the major cities and towns of the province, would now sit on the opposition benches in the provincial and national assemblies.
Sattar said the MQM decision to part ways with the PPP was final and it would contest the forthcoming elections independently.
The MQM announcement came just one day after nine PPP legislators in the Punjab assembly broke ranks and joined the Pakistan Muslim League (N).
The MQM, which had its differences with the ruling PPP government on a few occasions in the last five years but always was pacified and brought back into the coalition governments, said the final straw had come with the withdrawal of cases and bounty announced for the arrest of eight suspected gangsters affiliated with the banned Peoples Aman Committee in Lyari.
The Sindh government issued the notification about the withdrawal of cases and bounties despite strong protests by the MQM in the provincial assembly in the last few days.
"We have continued supporting the PPP government for the sake of democracy and politics of reconciliation and we didn't part ways earlier because they would have accused of trying to derail the democratic process," Sattar said.
"But despite our best efforts to convince the PPP leadership including the President and Prime Minister about the pitfalls off ending the local bodies system in Karachi and Sindh and about the growing criminal activities of the gangsters in the People Aman Committee, no one paid heed to us," he added.
He said it had becoming increasingly difficult for the MQM to face its voters and supporters given the law and order situation in Karachi.
The MQM which represents the Urdu speaking people known as Muhajirs, who migrated from India, has dominated elections in the city since its formation in the late nineties.
Karachi: The ruling Pakistan Peoples Party suffered a major setback on Saturday after the Mutthaida Qaumi Movement (MQM) announced it would no longer be part of the coalition government in Sindh province and at the centre.
First Published: Saturday, February 16, 2013, 21:29