Sinn Fein and other opposition parties have called for a general election after Leo Varadkar announced he would step down as Fine Gael leader.

Mr Varadkar said he would stay on as Taoiseach until a successor has been chosen by his party in a shock announcement made outside Government Buildings on Wednesday.

Sinn Fein leader Mary Lou McDonald said it marked “a critical moment in Irish politics”, while the Social Democrats, Labour, People Before Profit and Aontu also called for a general election.

“The decision of who now leads government as taoiseach must be placed in the hands of the people,” Ms McDonald said.

The decision of who is in government must be placed in the hands of the people. And today’s announcement can have only one conclusion: the calling of a general election.”

She said if the Government was “so confident in your achievements”, then it should be “tested and validated through the ballot box”.

“Rather than limping on, and rather than passing the office of taoiseach amongst yourselves again, the correct democratic route at this point is to go to the people,” she said.

Social Democrats leader Holly Cairns said that while she wished Mr Varadkar well, that the “writing is on the wall for this Government”.

“And it’s clear that this Government don’t believe the public have confidence in their leader. Taoiseach, it is in that context that the next taoiseach should be elected by the electorate, not by Fine Gael.

“We don’t need a new Fine Gael taoiseach. We need a new government. We need a general election.”

In his reply to Ms McDonald, Mr Varadkar said that under the Irish constitution the taoiseach is voted in by the Irish parliament, the Dail.

“It’s not unprecedented for the Dail to elect a new taoiseach during its term: that’s how I succeeded Enda Kenny. That’s how Brian Cowen succeeded Bertie Ahern, it’s how Jack Lynch succeeded Sean Lemass and indeed there are many other examples in our 100 years of democracy where a taoiseach changed without there being a general election.

“We even have one example where an entire government changed and that is when John Bruton became taoiseach after Albert Reynolds. So there’s nothing unusual about any of this.”

He told Ms Cairns that “the work of the Government will continue”.

“Any government has to be bigger than any one person that’s in it. And this Government always has been. I’ve no doubt that it will do its work, perhaps better under future leadership than it has to date.”

He said that when he first entered government in 2011, there was “mass unemployment”, “people were leaving the country in droves”, and there was a “big budget deficit”.

“It meant that we sat down as ministers every couple of months writing a budget: ‘How do we cut another 400 million?'”

He said that they also had to grapple with Brexit, the Covid-19 pandemic, and an inflation crisis that he said was “coming to an end”.

“There will always be problems and challenges. There will always be a crisis, and if not one, there’ll be two or three. That perfect country that has no problems, it doesn’t exist. It only exists in fairytales. We have to be honest with the public about that.”

After speaking about the challenges of the housing crisis, he said: “I wish we could have done more and done it faster. Absolutely, I do.

“And my biggest regret, if there is one, is that it’s not possible to solve all the country’s problems at once. But we’ll keep working on it.”

Ms Cairns said that it was “farcical” to suggest it was a “fairytale” to own a home or to have access to disability services.

“The problem is that on this journey that you’re speaking about going from deficit to surplus, people have been left behind. And when you have that surplus, you’re not using it to address those issues.”

She added: “We need real change in Ireland, the kind that can only be brought about by a general election. We need to give people in this country a say on who will be the next person to lead this country, who will form the next government and what their mandate will be.

“Calling an election now is the only way out of this mess for so many people.”

Mr Varadkar accused Ms Cairns of trying to “misrepresent and twist my words” and asked whether she had “engaged in honest politics”.

“I think there’s potential in you and I think the potential in your party, but my fear is an obvious one, it’s that you are very much a politician of the social media age. And it’s not about truth. It’s not about information. It’s about the clip to post online.”

People Before Profit TD Richard Boyd Barrett said: “We don’t need a shifting of the deck chairs on the Titanic.

“We don’t need an internal election in Fine Gael. We need the people to decide, we need a general election.”

He added: “We know perfection is not possible. But I tell you what we do think: in one of the richest countries in the world, we think it is shameful that we have the worst homelessness crisis in the history of the state that gets worse week in, week out, month in, month out.”