Norway’s coalition government has collapsed after the populist right-wing Progress Party pulled out in a dispute about a suspected terrorist supporter repatriated from Syria.

Progress Party leader Siv Jensen announced the decision on Monday (local time), after discussions with her party leadership and Prime Minister Erna Solberg.

The suspected Islamic State supporter, a Pakistan-born woman, was repatriated late on Friday with her two children.

“We could have welcomed the children, but we do not compromise with people who have participated in terrorist organisations,” Ms Jensen said.

“I brought us into government, and I’m now taking the party out.”

Iraqi refugees and displaced Syrian women in the al-Hol camp. Photo: Getty

The government approved the repatriation of the trio from the Kurdish-controlled al-Hol refugee camp in Syria in October, acting on information that the five-year-old boy was very ill.

The mother, who has not been named, was reportedly raised in Oslo, in a Pakistani-Norwegian family. She left Norway in 2013 and was arrested upon her return on suspicion of being a member of Islamic State.

Her lawyer said she denied the charges and would cooperate fully with police.

The move comes as countries all around the world are being urged to repatriate citizens from Syria. More than 60 Australian women and children are thought to still be in the war-torn nation following the collapse of Islamic State.

Ms Jensen – who also resigned as the country’s finance minister – said her party also felt it had made too many compromises. She said she believed Ms Solberg was her party’s favoured candidate to stay on as prime minister.

Ms Jensen’s exit, along with six other Progress cabinet ministers, leaves Ms Solberg with a string of posts to fill, including that of oil and energy minister to oversee Western Europe’s biggest oil and gas industry.

The move means Ms Solberg no longer has a parliamentary majority. She has said her centre-right coalition will remain as a minority government.

-with AAP