UPDATE 3-Serbian party seeks to cement power in early election
* Minister quits amid row over reforms
* SNS leader Vucic in running for post of PM
* Party emerged from ultranationalist radicals
By Aleksandar Vasovic and Matt Robinson
BELGRADE, Jan 25 (Reuters) - Serbia's dominant SNS party said on Saturday it would seek an early parliamentary election, betting that a surge in popularity would strengthen its grip on power and help it push through much-needed economic reforms.
Party leader and deputy Prime Minister Aleksandar Vucic said he would propose early polls at a meeting of the centre-right movement's leadership on Sunday, ending weeks of speculation about a possible March 16 ballot.
"It's time to settle the bill," he told a party congress. "It's up to us to take the risk and if the people so decide, we'll leave power."
Vucic's Serbian Progressive Party, already the largest in the ruling coalition, has been clamouring for an early election, saying an even stronger mandate would help speed up structural reforms essential to the country's recovery from a decade of war and isolation in the 1990s.
Tensions within the coalition over the pace and depth of those measures saw Economy Minister Sasa Radulovic, a non-party member of the cabinet, resign on Saturday.
Radulovic had threatened to quit this month amid resistance from unions and some in the government to reforms aimed at liberalising the labour market and cutting loose dozens of loss-making state firms.
The SNS is riding high in opinion polls, thanks largely to the personal popularity of Vucic and a high-profile anti-graft campaign he has been waging.
A big win for the SNS would almost certainly see Vucic become prime minister. It may force the Socialists of Prime Minister Ivica Dacic into opposition.
"Markets will take this quite well," said Timothy Ash, head of emerging markets research at Standard Bank. "A government with fresh and strong mandate will be well placed to accelerate the pace of reforms."
Once an ultranationalist disciple of the 'Greater Serbia' ideology that fuelled the wars of Yugoslavia's bloody collapse in the 1990s, Vucic has since rebranded himself as a pro-European reformer, embracing Serbia's bid to join the European Union.
The EU opened accession negotiations with Serbia on Jan. 21, a process that should help drive change in the largest country to emerge from the ashes of federal Yugoslavia. Serbia is unlikely to join before 2020.
"I can see them (SNS) winning the vote, but ... even if they garner enough to rule alone I see them forming a coalition so they can share out responsibility," said Marko Blagojevic, director of the Centre for Free Elections and Democracy.
"This will be the test for Vucic - is he a statesman or a politician?"
Vucic did not spell out how he would bring about an early election if, as expected, his party backs the idea.
But, with Dacic opposing an early poll, analysts said that either a majority of cabinet ministers would have to quit, or the SNS could force a confidence vote in parliament and bring down the government.
President Tomislav Nikolic, who founded the SNS with Vucic in 2008, would have to call the election by the end of the month if it is to coincide with a March 16 municipal ballot in the capital, Belgrade.
Dacic could not immediately be reached for comment. A close aide, who declined to be named, told Reuters: "We still believe elections were not necessary. These are plans of our coalition partner, but let's wait for their formal decision tomorrow."
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