Mr Parizeau had been criticized by his own supporters during the referendum campaign and he was forced by a near-revolt within the Parti Quebcois ranks to turn over the conduct of the referendum campaign to his separatist colleague Lucien Bouchard, leader of the Bloc Quebecois in the national parliament. Mr Parizeau also angered the province with his graceless speech following the ballot count on which he blamed the defeat on the ethnic vote and big money.
The resignation is also part of the separatists' strategy to attempt to capitalise on the momentum they believe they acquired during the campaign. By making way for the more popular Mr Bouchard to take over the government of Quebec, the independence movement can regroup for another attempt.
In a chorus of outrage that echoed across Quebec, members of ethnic minorities denounced remarks by Mr Parizeau yesterday, in which he blamed immigrants and big business for scuppering the latest bid for independence.
Community leaders demanded his resignation and warned that his comments to a crowd of disappointed sovereignty supporters late on Monday night could lead to communal violence.
Taking the podium to acknowledge the razor-thin victory of the federalist opponents of separation, Mr Parizeau declared: "We are beaten, it is true. But by what? By money and the ethnic vote.''
Just over four-fifths of Quebec's population is primarily French-speaking. Among the remainder are Anglo-Canadians as well as native Indians and a wide variety of immigrant communities, notably including Portuguese, Chinese and Haitians.