KUWAIT - Kuwait's cabinet resigned as expected on Thursday to avoid a grilling by parliament of three ministers, all members of the ruling al-Sabah family, amid calls for political and economic reform.

Lawmakers had asked to question the ministers in the latest of a series of challenges by an unusually assertive Arab parliament that have delayed important economic reforms.

"The ministers submitted the resignation to the prime minister, who will refer it to the emir," a parliamentary source told Reuters. The state news agency KUNA quoted Minister of State for Cabinet Affairs Roudhan Abdulaziz Al-Raudan as saying the government had resigned.

While tough questioning of ministers is an everyday occurrence in most parliaments, in Kuwait it is more akin to a direct challenge to the individual and an indirect challenge to the ruler, who has the last say in politics.

The resignation could be linked to sectarian tension in the Gulf region, where Gulf Cooperation Council (GCC) countries have backed Bahrain's Sunni Muslim monarchy in a crackdown on  protesters who are mainly Shi'ite Muslims.

The news service of al-Watan newspaper, owned by a member of the ruling family, said the foreign minister was set to face a question that could "provoke sectarianism".

"The government was ready to face any questioning except that of Saleh Ashour," it said, referring to a Shi'ite member of parliament. "The prime minister refused to have it discussed in order to prevent provoking sectarianism or insulting friendly countries."

Ashour wanted to discuss Bahrain. Ashour has said he was insulted in a discussion show on Bahraini state television for comments he made in support of Bahraini protesters.

Saudi Arabia, Kuwait and other GCC states see Bahrain as a red line in popular uprisings that have swept the region since January. They view Shi'ites as a possible vehicle for the influence of non-Arab Shi'ite power Iran.

The foreign minister, Sheikh Mohammad al-Salem al-Sabah, said on Thursday Kuwait might expel three Iranian diplomats over a spying row and had withdrawn its ambassador from Tehran.

PARLIAMENTARY CHALLENGE

Several hundred Kuwaitis demonstrated earlier this month calling for a new prime minister and political freedoms, but the world's fourth largest oil exporter has not experienced anything on the scale of the unrest in nearby Bahrain.

Parliamentary sources said on Wednesday they expected the Gulf state's emir, Sheikh Sabah al-Ahmad al-Sabah, to reappoint Prime Minister Sheikh Nasser al-Mohammad al-Sabah -- who is also the ruler's nephew -- to form another cabinet.

Sheikh Nasser survived a parliamentary challenge in January after being questioned about possible violations of the constitution and public freedom.

Sheikh Nasser is the first Kuwaiti prime minister to agree to be questioned. Previously this would have been taboo as the premier was traditionally also the heir apparent, until the emir separated the two positions in 2006. Kuwait's emir has in the past dissolved parliament to prevent questioning of the premier.

Shafiq Ghabra, professor of political science at Kuwait University, said regional tensions as popular protests sweep the region had only heightened existing problems in Kuwait.

"What's clear is that the Kuwaiti government is not able to continue to function in its normal composition, and that a political crisis has been brewing even before the existing revolutions and uprisings in the region," he said.

Political analyst and former oil minister Ali al-Baghli said the government had no choice but to resign "after it was faced by numerous questioning requests".

Asked if Sheikh Nasser, who survived a similar motion against him last year, would be reappointed, he said: "It's all up to the emir, and we respect and trust his choice, whether it's going to be Sheikh Nasser or someone else."