UPDATE 2-Czech party leader quits cabinet, others to follow

* Rift over alleged corruption rocks centre-right coalition

* PM says will propose departure of two other ministers

(Adds PM saying two other ministers should leave)

PRAGUE, April 8 (Reuters) – The leader of a junior Czech
coalition party quit the cabinet on Friday amid allegations of
corruption, and the prime minister said he would propose that
two other party ministers also quit.

Prime Minister Petr Necas said the coalition will survive,
but did not say who would replace the three ministers.

Vit Barta, informal leader of the centrist Public Affairs
party, resigned as transport minister but his party remained in
the coalition, which has promised to cut the budget deficit and
reform pensions and health care.

Public Affairs, which won 10.9 percent of the vote in last
year’s election, has been a destabilising factor in a coalition
led by the Civic Democrats.

The government won investor confidence by pledging to
balance the budget by 2016 and push through reforms, but its
efforts have been hampered by a series of graft scandals and
clashes within and between the three coalition parties.

Public Affairs is a newcomer in top politics after a May
election elevated it to the government for the first time.

Its participation in the government has raised some eyebrows
due to links between Barta and a private detective agency ABL
that he used to own and which tailed politicians.

Media reports of alleged attempts by Barta to bribe party
members to secure their loyalty caused a rift within the party
and angered the other two coalition partners, Civic Democrats
and TOP09.

Barta denied any wrongdoing and said he would resign.

Analysts have said Public Affairs may split up, but the
coalition would still find enough support in the lower house to
stay in power, although its ability to push through planned
reforms would be hampered.

PROPOSED RESIGNATIONS

After a meeting of coalition leaders late on Friday, Necas
said he would propose that along with Barta, two other Public
Affair ministers, Interior Minister Radek John and Education
Minister Josef Dobes, also leave the cabinet.

“With regards to the functioning of this government I
consider it unacceptable that people that are linked directly or
indirectly with company ABL or other intelligence service
companies hold positions within the government of which I am the
chairman,” Necas told a news conference.

He said he would submit the proposed resignation of the two
ministers as well as Barta’s resignation to President Vaclav
Klaus on Monday. The party would then be left with only one post
in the cabinet, Regional Development Minister Kamil Jankovsky.

Public Affairs representatives left the meeting in protest.

In a statement, the party said the requirement for the
departure of the other two of its ministers was unacceptable.

Necas had signalled, after accepting Barta’s resignation,
that there would be further changes to some cabinet posts.

Public Affairs expelled three dissenting members of its
24-strong parliamentary caucus this week, reducing the
coalition’s majority in the 200-seat lower house to 115.

The cabinet has already been weakened by several graft
scandals, including allegations that Defence Minister Alexandr
Vondra, a key ally of Necas, had overseen an overpriced services
contract during the country’s EU presidency in 2009.

Vondra denied any wrongdoing but coalition partners have
been calling for his departure.
(Reporting by Jana Mlcochova, Jan Lopatka and Robert Mueller;
Editing by Andrew Heavens)

UPDATE 2-Czech party leader quits cabinet, others to follow