Iraqi authorities have issued an arrest warrant for the mainly Shia country's Sunni vice-president, leading to fears of the government's collapse and an increase in sectarian tensions.
The warrant for Tariq al-Hashemi was issued under anti-terrorism laws, interior ministry officials said.
It came after bodyguards of Mr Hashemi who were arrested reportedly accused him of having links to terrorism.
The main Sunni political bloc has said it is boycotting cabinet in response.
The Al-Iraqiya parliamentary bloc, which represents most of Iraq's Sunni Arab community, had already withdrawn from parliament, accusing Shia Arab Prime Minister Nouri Maliki of monopolising power. Mr Hashemi has been an outspoken critic of Mr Maliki.
President Jalal Talabani's office issued a statement saying he was "surprised" at the announcement of the warrant.
"Making hasty decisions and announcing them in the media will complicate the political solutions needed in this delicate stage in Iraq's history," the statement said.
The BBC Middle East correspondent Jim Muir says Iraq is now facing its biggest political crisis since the unity government was formed a year ago, after months of drawn-out negotiations.
The upheaval comes the day after US troops withdrew from Iraq.
On Monday, Iraq's state-run television aired what it said were confessions by alleged terrorists linked to Mr Hashemi. The men said they had been paid by Mr Hashemi's office to carry out attacks on officials and police officers.
One man said he had been given $3,000 (£2,000) by Mr Hashemi himself. The identities of the men could not be confirmed, and Mr Mutlak said al-Iraqiya did not recognise the confessions.
Maj-Gen Kamal Hussein, a senior interior ministry official, told a news conference: "According to article four of the anti-terrorism law, an arrest warrant has been issued against Vice President Tariq al-Hashemi and it is signed by five judges."
Mr Hashemi, who has been banned from leaving Iraq, is reported to have flown to the semi-autonomous northern enclave of Kurdistan on Sunday, but our correspondent says he is unlikely to be arrested immediately.
The warrant was drawn up on Saturday, but its announcement was delayed as attempts were made to convince the Sunni bloc not to begin its boycott.
Those attempts appear to have failed, says our correspondent, as Deputy Prime Minister Saleh al-Mutlak has now said al-Iraqiya ministers will suspend their participation in the cabinet.
Mr Mutlak said the decision was "based on the deterioration of the political process, and to ensure that the country will not head towards a catastrophe if Maliki's dictatorship continues".
Iraq's government of national unity was formed in December last year, after months of debate following inconclusive elections in March. It was intended to include all of Iraq's main political factions.
But the increase of divisions along Sunni-Shia lines has led to fears of a return to the sectarian clashes which killed thousands in 2006-7. The absence of US troops who previously maintained security has increased these concerns.
Former Iraqi leader Saddam Hussein was a Sunni, and many Sunnis believe they are being penalised by the Shias, who have grown in influence since the US invasion.
Sunnis have accused Mr Maliki of taking an authoritarian approach to government.
The president of Iraqi Kurdistan, Massoud Barzani, earlier called for talks to prevent the "collapse" of the unity government, warning that "the situation is headed towards deep crisis".
White House spokesman Jay Carney said the US was urging all sides to "work to resolve differences peacefully and through dialogue in a manner consistent with the rule of law and the democratic political process".