France's Prime Minister Manuel Valls presented the resignation of his government to the president on Monday, Francois Hollande's office said in a statement.

The statement said a new government would be formed on Tuesday in line with the "direction he (the president) has defined for our country."

The move comes a day after leftist Economy Minister Arnaud Montebourg called for new economic policies and questioned what he called Germany's "obsession" with budgetary rigor.

"France is the eurozone's second-biggest economy, the world's fifth-greatest power, and it does not intend to align itself, ladies and gentlemen, with the excessive obsessions of Germany's conservatives," Montebourg said on Sunday.

Valls, a centrist within the socialist party, replaced Jean-Marc Ayrault as prime minister in March. He was appointed by French president Hollande to lead a cabinet reshuffle after serving as interior secretary. 

Since then, policy differences between Socialist Party leftists like Montebourg and centrist supporters of the prime minister have continued to cause infighting in the government led by Valls. 

Montebourg's criticism of the economic policy in Germany, France's ally, seems to have been the last straw. Valls has "consistently said he will not tolerate any form of insubordination among his ministers," according to The Guardian. Valls' aides said on Sunday "that Montebourg had crossed a line."

Valls' resignation gives him the power to set up a new cabinet. 

France is facing a mountain of economic problems. The country showed zero growth in the second quarter, forcing the government to cut its 2014 growth forecast in half from the expected 1%.  

This month, Valls' approval rating dropped to a new low of 36%, while Hollande remained the most unpopular president in more than half a century, an Ifop poll showed on Sunday.