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Prime Minister Sheikh Jaber Al-Mubarak turned down Monday's request from Kuwait's ruler to form a new government, Gulf News reported, saying he was offended over the "baseless lies" against him, which was preventing him from taking up the role.

Mubarak, along with his cabinet, quit last week triggered by the alleged embezzlement of nearly $800 million from a military aid fund.

"Out of respect to the invaluable confidence of Your Highness and out of appreciation to the Kuwait people, I find it necessary for me first to prove my innocence," he said in a letter to Kuwait's ruler quoted by Gulf News.

Kuwait's Emir Sheikh Sabah al-Ahmad al-Sabah also fired two warring cabinet ministers at the centre of embezzlement allegations.

He issued the decree just days after Kuwait's Prime Minister and cabinet resigned amid another inquiry.

Al-Sabah fired on Monday both Defence Minister Nasser al-Sabah and Interior Minister Khaled al-Sabah, who had issued statements against each other.

The defence minister says he discovered a $790 million embezzlement in the office while the interior minister served as his predecessor.

The defence minister is seeking his predecessor's prosecution along with five other top defence ministry officials over the alleged embezzlement.

The cabinet resigned last week after a minister stepped down following a grilling by parliament.

The country's parliamentary elections are expected in November 2020.

The departure of the premier and his ministers paves the way for the formation of a new cabinet in a country accustomed to disputes between lawmakers and the ruling family-led government.

Read more: 'That's enough!': Anti-corruption protests reach Kuwait amid regional uprisings

Kuwait is the only Gulf state with a fully elected parliament and the government is controlled by the ruling family.

The oil-rich country has been shaken by political disputes between lawmakers and the government for over a decade, with parliament and cabinets dissolved several times.

A demonstration held outside the Kuwaiti parliament over alleged rampant corruption was reminiscent of past crises that have marred political life in the country.

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