UPDATE 2-Czech PM says on track for quick deal on government

                                
 * PM sees deal on new cabinet possible on Sunday
                                
 * No candidates for new PM yet
                                
 * Government will focus on combating downturn
                                
 
 (Adds details on economic measures, background)
                                
 By Jan Korselt
                                
 PRAGUE, April 3 (Reuters) - The Czech government and
opposition leaders may reach a deal on a caretaker government
and an early election on Sunday, outgoing Prime Minister Mirek
Topolanek said on Friday.
                                
 Topolanek's centre-right minority government is leaving
after a no-confidence vote last week, halfway through the
country's six-month European Union presidency term and just
ahead of U.S. President Barack Obama's visit for an EU-United
States summit in Prague this weekend.
                                
 "All the parameters (of an agreement) are up for discussion,
and we will hold a definitive discussion on Sunday. I felt
willingness to reach some conclusion on Sunday," Topolanek said
after meeting opposition chief Jiri Paroubek.
                                
 The success of the no-confidence motion undermined the Czech
EU presidency and increased the power of euro-sceptic president
Vaclav Klaus, a strong opponent of the EU's Lisbon treaty
ratification, who will appoint the new prime minister.
                                
 Topolanek and the Social Democrat chief Paroubek have been
hammering out a deal to form a cabinet to lead the central
European country ahead of early polls in mid-October and enact
measures to fight an economic downturn.
                                
 Neither or Topolanek's three-party coalition, led by his
right-wing Civic Democrats, nor the left has majority in the
lower house, and the two need to agree on any new government or
policy to avoid being dependent on a handful of defectors from
both camps who hold the middle ground.
  They seemed to be near to clinching a deal earlier this week
but protests within Topolanek's right-wing Civic Democrats threw
doubt on the outcome.
                                
 The new government is likely to consist of mainly
non-partisan experts and no candidates have been named for prime
minister, whose tasks are likely to include chairing the
European Union summit in June. The exact date of Topolanek's
departure has not been determined, but he is expected to go
before the summer.
                                
 Analysts also forecast looser policy as the election nears.
                                
 The main parties have agreed to negotiate on proposals to
help smooth out the economic downturn, and on Friday the lower
house gave preliminary approval to cuts in taxes and faster
asset depreciation, measures aimed at helping corporate cash
flow amid a sharp economic downturn. [ID:nL3287408] 
 (Writing by Jan Lopatka; Editing by Louise Ireland and Angus
MacSwan)