PRAGUE A junior party in the Czech center-right coalition called on its ministers to quit the cabinet on January 10 due to a row with Prime Minister Petr Necas, a move which could bring down the government.
The crisis comes after Necas removed Karolina Peake, leader of the LIDEM junior coalition partner from her post as defense minister earlier on Thursday, just a week after she took office.
It also follows a vote in the lower house on Wednesday where the coalition pushed through bills to hike taxes and cut the 2013 budget deficit.
LIDEM's departure from the cabinet, where it has three ministers, would weaken the already minority administration a year and a half ahead of an election planned for mid-2014.
The cabinet has pushed through mild reforms of the social, health and pension systems, and is on target to cut the state fiscal gap below an EU-prescribed 3 percent of GDP in 2013.
The central European country of 10.5 million enjoys investors' confidence thanks to low government debt and its budget plans, but the reform drive and two years of austerity have eroded the government's support among voters.
The government could stumble through the rest of its term but with limited power to advance further legislation, or it could fall as a result of the crisis, provoking early polls.
"I suppose that this means departure to opposition. Our ministers got clear instruction from the leadership to leave the cabinet on January 10," Peake told reporters.
She said the party had not decided if it would support any opposition efforts to overturn the government, suggesting there might be a chance for Necas to hang on to power.
"I assume we would discuss how to vote in a no-confidence motion when the situation comes up," she said.
REASON FOR FIRING
Necas said he asked President Vaclav Klaus to dismiss Peake as minister because she fired top officials at the NATO member country's defense department against his will.
"My confidence in her dropped not to zero but into negative readings," Necas told a news conference.
"Madam minister acted as if the ministry was conquered enemy territory ... it was a stabilized, well-functioning department, there was no reason for any spasm," he said.
Necas said he was aware his decision may damage cabinet stability, but that he could not act otherwise.
With 98 out of 200 seats in the lower house, the government relies on independents to pass legislation. Without LIDEM, its support shrinks to 90 votes, but there are several independent deputies as well as representatives of another former coalition party that may help the government out.
LIDEM has very low public support, and its chances of winning any seats in an early election appear very remote.
The main opposition party, the centre-left Social Democrats who lead opinion polls, called a leadership meeting for Friday to discuss whether to call for a vote of no-confidence.
The cabinet began its four-year term in 2010 with 118 seats, the biggest majority of any Czech government in two decades, raising hopes for bold reforms to stem the budget deficit. But a series of rows have seen its majority dwindle.
(Additional reporting by Jason Hovet; Writing by Jan Lopatka; Editing by Jon Hemming)