In announcing the cabinet decision, the Caribbean nation's Attorney General Justin Simon told Reuters that he had received from U.S. authorities a request that King be detained pending a formal extradition process.

The small twin-island state was at the heart of Stanford's business empire stretching from the Caribbean to the United States, Latin America and Europe. Antigua's biggest bank, Stanford International Bank. (SIB), sold the certificates of deposit (CDs) that U.S. investigators say bilked thousands of investors out of billions of dollars.

King was suspended last week as head of Antigua and Barbuda's Financial Services Regulatory Commission.

"Cabinet ... has agreed to accept the Commission's recommendation that Mr. King's employment as administrator be terminated with immediate effect," Simon said in an interview by telephone from the Antigua capital St. John's.

A U.S. Securities and Exchange Commission indictment on Friday accused King along with Stanford and four associates of fraud, conspiracy and obstruction relating to the operation of a "massive Ponzi scheme".

Simon said that while King's detention had been requested, the U.S. request would have to be considered by Antigua and Barbuda's judicial authorities under the country's laws.

He said Antigua and Barbuda's financial regulators would be investigating other offshore companies in the country to ensure that the "cancer" from the Stanford case had not spread wider.

"The net may well have to be widened and the investigation probe deeper." Simon said.

(Reporting by Pascal Fletcher; Editing by Toni Reinhold, Leslie Gevirtz)