UPDATE 1-Finland's government to resign after healthcare reform fails

Finland's government will resign on Friday after ditching plans to reform the healthcare system, a key policy, the president's office and an ally of Prime Minister Juha Sipila said.

Sipila will officially offer his government's resignation to the president on Friday at 0800 GMT, the president's office said in a statement. The government will hold a news conference at 0845 GMT.

"Prime Minister Sipila will request his resignation because the healthcare reform cannot be accomplished during this government term," Antti Kaikkonen, the head of Sipila's Centre Party's parliamentary group wrote on Twitter. Earlier on Friday, Finland's public broadcaster Yle said the government was about to announce that it has dropped plans for major healthcare and social services reform, citing unnamed government sources.

(Reporting by Anne Kauranen Editing by Catherine Evans)