42 out of 73 members of Mongolia's legislature, the Great Khural, voted to oust Jargaltulgiin Erdenebat along with his 15 cabinet ministers.

A majority of the ruling Mongolia People's Party (MPP) voted for the removal measure. The party now has 45 days to appoint a new PM.

Legislators accused Erdenebat of granting 800 billion tugrik ($328 million) in concessions to eight companies related to his cabinet ministers, providing illegal cash allowances to voters and presenting a poor image to the public.

Erdenebat has fiercely denied the allegations and in a statement before the vote he lashed out against "Mongolia's practice of ousting its cabinet", which he said had been toxic to the "country´s development and poisons our economy".

"Although, some of us point to foreign investments as economic killers, in reality we politicians are the internal killers of our economy and suffocate our own growth," he said.

Mongolia´s economy has performed well under Erdenebat's government, with a dramatic improvement in the first half of 2017 on the back of growing demand for coal from China.

Political instability, however, has been a constant problem for the young Central Asian democracy, which passed its first constitution in 1992 after decades of Communist rule.

The country has been through 15 different cabinets in the years since, each lasting an average of 1.5 years.

Late last month, the MPP issued a letter calling for Erdenebat and other senior leaders to resign, alleging they had violated the law in pursuit of their own business and political interests.

The letter came just weeks after a close loss by the party's candidate in a scandal-plagued presidential election.

The decision to demand Erdenbat's resignation was made after the party leadership declined to punish its bigwigs for their alleged role in a $25 million conspiracy to sell government positions that many believe cost the MPP the presidency.

The MPP won by a landslide in the 2016 elections, taking 65 out of 76 seats in the national parliament, and formed the cabinet headed by Erdenebat, who is alleged to have used his political powers to spy on fellow party members.