“I will not participate in a government under which police are beating people,” Boiko Borisov told parliament.
Tens of thousands have protested across Bulgaria, the EU’s poorest country, against high electricity bills.
PM Boiko Borisov tried to calm the protests on Tuesday by promising to slash prices.
He also pledged to punish foreign-owned power companies that he said charged too much.
Twenty-five people were taken to hospital after protesters clashed with police late on Tuesday.
Correspondents say that many Bulgarians are deeply unhappy over high energy costs, power monopolies, low living standards and corruption.
It was not immediately clear whether or not a parliamentary election scheduled for July would now be brought forward.
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