* Klaus says parties determined to go on
* PM Necas says long way to go before deal
(Adds PM comments, background)
By Robert Mueller and Roman Gazdik
PRAGUE, April 14 (Reuters) - Party leaders in the ruling
Czech coalition have pledged to maintain their alliance despite
a corruption scandal that has brought it to the brink of
collapse, President Vaclav Klaus said after talks on Thursday.
Klaus stepped into a rift that has threatened to break up
the centre-right cabinet, popular with investors thanks to
fiscal reform plans, amid allegations of bribery, improper
business relations and backstabbing among the coalition parties.
"I was assured by all three chairmen of the coalition
parties that they are firmly determined to continue on the basis
of the three-party coalition and that they know well that each
of them must back off a little," Klaus told reporters.
Allegations of corruption and improper relations between
business and political figures have been a common feature of
Czech politics for years.
Financial markets have so far largely ignored the
coalition's problems. The country's state debt is less than half
the EU average and the cabinet has won support for its plans to
eliminate the budget deficit by 2016 and reform pensions.
Prime Minister Petr Necas said the parties discussed seven
options on Thursday on overcoming the lack of trust in the
coalition.
"It is important that we are talking, that no one broke off
the talks, however it is still a long way to go and a great deal
of work toward an agreement," Necas said after the talks. The
next round of discussions was scheduled for Monday.
VOTE OF CONFIDENCE
Necas said the cabinet would seek a fresh vote of confidence
if the crisis is averted. Any agreement is expected to include a
cabinet reshuffle as well as additions to the coalition contract
which defines agenda priorities as well as a division of power.
An opinion poll on Czech Television showed 67 percent of
Czechs have no trust in the cabinet, giving the parties a
powerful incentive to avoid an early election.
The dispute, the latest and most serious in the coalition
formed last year, began with allegations that Vit Barta, the
main figure in the smallest coalition party, the centrist Public
Affairs, gave cash to party members to keep their loyalty.
The pressure on Public Affairs, a new party in national
politics and always an unstable factor in the cabinet, increased
after a newspaper said Barta had devised a plan in the past to
enter politics to boost business for his detective firm.
Barta resigned as transport minister last week, saying he
needed time to prove the allegations wrong. Klaus has yet to
accept his resignation.
Without Public Affairs, the cabinet's ranks in the lower
house would narrow to 94 from 118. It may rely on several rebels
who have left Public Affairs but so far that would not be enough
to regain a majority.
(Writing by Jan Lopatka; editing by Tim Pearce and Jeffrey
Heller)
