Israeli Defence Minister Ehud Barak says he is resigning as head of the Labour party to form his own faction.
Mr Barak is heading a breakaway group - Independence - which includes four other Labour MPs, reports say.
Correspondents say the move strengthens Prime Minister Benjamin Netanyahu's right-wing coalition, as it allows Mr Barak's party to remain in government.
Labour is due to vote on whether to quit the coalition over Mr Netanyahu's handling of the Mid-East peace process.
But Mr Barak's surprise move pre-empts that decision, due next month, suggesting he still believes Mr Netanyahu is genuine about seeking peace with the Palestinians, says the BBC's Jon Donnison in Jerusalem.
The fledgling peace talks broke down late last year over Israel's refusal to renew a freeze on Jewish settlement building in the occupied West Bank. BBC News
