Scottish government survives no confidence vote after leader's resignation

LONDON (Reuters) - The Scottish government survived a vote of no confidence on Wednesday, giving the Scottish National Party (SNP) a chance to pick a new leader to replace outgoing First Minister Humza Yousaf.

Yousaf's decision to step down as first minister and SNP leader on Monday has thrown the party into chaos and boosted hopes in Britain's opposition Labour Party that it can regain Scottish seats to win a national election later this year.

Polls show that Labour is ahead of or level with the SNP in Scotland for the first time in a decade.

Yousaf said he would resign after he ended a coalition with the Green Party. It means the SNP are seeking a third leader in little over a year, undermining what had once seemed like its iron grip on power in the devolved Scottish government.

While the Greens made Yousaf's position untenable by withdrawing their confidence in him personally, they voted with the SNP against Wednesday's vote of no confidence in the Scottish government.

The no confidence motion was defeated by 70 votes to 58.

Defeat for the government would have led to the resignation of all ministers and most likely triggered a Scottish election.

With that outcome averted, Yousaf will remain in office until the SNP chooses a new leader. Former SNP party leader John Swinney and Yousaf's old leadership rival Kate Forbes have both said they are considering running.

Yousaf took over the party in March last year, after the resignation of long-time leader Nicola Sturgeon, who faced splits in the party over the best route to independence for Scotland and proposed transgender recognition legislation.

Police have also probed the SNP's finances, and Sturgeon's husband has been charged with embezzling funds from the SNP. She has been arrested and questioned but not charged. Both deny wrongdoing.

(Reporting by Alistair Smout, editing by Elizabeth Piper and William James)