COLOMBO, Sri Lanka (AP) _ The former finance minister resigned from Parliament and the governing party Friday after accusing the government of being unable to solve Sri Lanka's ethnic problems.

Ronnie de Mel demanded new elections, saying it was the ''only way to solve the present problems of our people.''

De Mel, 63, was finance minister from 1977 until 1987. He said the government had lost the right to rule by not holding elections.

The United National Party of President Junius R. Jayewardene has been in power since 1977. It held a referendum to extend its governing period in 1982 after its five-year term expired, and general elections are due in August 1989.

De Mel, a Sinhalese Buddhist, criticized the government for failing to end the Tamil insurgency.

Tamil militants, who claim discrimination by the Sinhalese majority, are fighting for a separate homeland in the island nation's north and east. Tamils make up 18 percent of Sri Lanka's 16 million people.