(AP Photo/Fareed Khan)
Holding a copy of the Quran, the Muslim holy book, Zulfikar Mirza accused the powerful Muttahida Qaumi Movement of responsibility for kidnapping, extortion and violence that has killed more than 400 people since July. He also accused the party of killing journalist Wali Khan Babar earlier this year.
"I am saying it openly that the MQM killed him," he told a news conference televised live around the country.
In unusually blunt comments, he singled out MQM leader Altaf Hussein, who critics say runs the party like a cult from his home in London, as a "killer" and the head of a "terrorist organization."
In a statement, the MQM said Mirza himself was a patron of murderers and his remarks were a "heinous bid to spark the fire of hatred, violence and insurgency."
There was no immediate reaction on the streets of the city of 18 million people.
The city, Pakistan's economic hub and largest city, has long been plagued by ethnic and political bloodshed, but the current surge has been particularly prolonged.
Analysts say the MQM is involved in a turf war with another political force in the city, the Awami National Party, and the Pakistan Peoples Party, of which Mirza was a member.
Killers linked to the parties are behind most of the violence, they say.
The MQM represents the region's Urdu-speaking population, while the ANP is supported by Pashtuns who have arrived in the city in great numbers over the last 10 years, challenging the dominance of the MQM.
Many victims have been targeted because of their ethnic background.
Mirza, who was the senior minister for the PPP in the city, said he was resigning because of differences with Interior Minister Rehman Malik, who is trying to negotiate an end the violence. The bloodshed in Karachi threatens the nation's stability, because the parties are in the ruling coalition government. The violence is a major distraction from the country's battle against militants.