Yukon Party cabinet minister Brad Cathers broke ranks with the government today, announcing his resignation from cabinet, the party caucus and as house leader.

Cathers served as the minister of Health and Social Services before being reassigned in July 2008 to Energy, Mines and Resources.

At a morning press conference, Cathers said he can no longer in good conscience serve under Premier Dennis Fentie after the premier "lied" to his caucus and then to the public, denying that there were negotiations with Calgary-based energy giant ATCO to privatize the territory's public utility.

"The premier was a lot more involved in the discussions with ATCO than he had indicated," read Cathers in his opening statement to media assembled at the Westmark Whitehorse Hotel this morning.

"And the government did in fact consider the sale of public hydro assets and privatization."

On top of keeping cabinet and the energy corporation board in the dark for more than a month after receiving in October 2008 what Fentie called an unsolicited proposal from ATCO to merge its Yukon-based assets with those of the Yukon Energy Corp., Cathers said the premier misled the public.

"There have been more than a number of occasions and incidents that it became clear to me ... there was no willingness to do as we should do and admit that there were statements made on the public record that were not true," Cathers added.

While stressing that he would remain a member of the Yukon Party, the MLA for Lake Laberge's decision to sit as an independent is a huge blow to the Fentie regime, reducing it to minority government status in the legislative assembly.

"When you reach a situation between where you are forced to choose between trying to continue to work within the team, and accomplish our work, versus the fundamental breaking point of compromising principles …" said Cathers of what he called one of the most difficult decisions in his life.

"It is a matter of my perspective of conscience - and I recognize there will be those that agree with me, there will be those that condemn me for this - but I'm doing what I feel that I have to do to avoid compromising my integrity."

Following a blowout in the premier's office last December when Willard Phelps, the-then energy corporation chair, learned of the back-room deal making with ATCO and confronted Fentie, Cathers said he urged the premier to come clean, but to no avail.

"I don't understand some of the statements that (Fentie) made on this, ... rather than acknowledging the fact that the government did indeed consider sale of those public type of assets," said Cathers.

"At that point, the government did tell ATCO that we would not sell those type of assets. I don't see why the premier would not come clean about it and admit that fact."

After determining the sale of energy corporation assets to ATCO was not in the public's interest, Fentie forged ahead with negotiating a potential merger, yet in public statements said there were no negotiations.

After Phelps and three other directors resigned from the energy corporation in June to protest Fentie's attempt to privatize the public utility, Fentie continued to deny there were any such negotiations.

Even after Phelps released a "joint position paper" that outlined a merger of the energy corporation with ATCO's Yukon Electrical Co. Ltd., potentially giving major decision making powers to ATCO, Fentie claimed it had nothing to do with privatization but was "rationalization."

Today, Cathers said from his perspective, everything from selling off the public assets to the potential merger were all varying degrees of privatization.

Facing pressure from opposition parties who demanded the premier resign, or that his cabinet break ranks, Fentie continued the rationalization ruse by putting in the firing line Shirley Abercrombie, assistant deputy minister of Energy Mines and Resources, to explain the government's position.

Abercrombie said Fentie tasked her to engage in "exploratory" talks with ATCO.

These talks, which comprised six meetings in Calgary over seven months, were to discuss the possibility of the merger, but were not negotiations as there was not yet a mandate from cabinet to move in that direction, Abercrombie said.

With Cathers' revelations, it is now clear the premier was in the thick of the negotiations, despite claims by Fentie that it was Abercrombie who was in charge.

When asked if he wanted Fentie to resign, Cathers offered no straight answer. He was also vague on whether he would stand against the government in a vote of non-confidence that the official Opposition has vowed to move on when the legislature reconvenes this fall.

"I'm leaving room for making the right move, I'm not going to issue any specific calls for anything," Cathers said, adding that there were other disgruntled cabinet members.

"I want all my former colleagues to consider the situation, to understand, to consider their own personal experiences, I know there are a number that are unhappy with the situation."

With Cathers now as an independent MLA, the Yukon Party holds eight seats compared to nine sitting in opposition; five Liberals, two NDP and two independents.While house speaker Ted Staffen is a Yukon Party MLA, he is permitted to vote only to break a tie.

Fentie is in Dawson City today and was unavailable for comment.