UPDATE 1-Czech leftists say ready to talk further on budget

(adds details, quotes, background)

PRAGUE, Sept 26 (Reuters) - The Czech leftist opposition Social Democrats are ready to hold further talks on supporting the 2007 central state budget, the party's chief finance expert told Reuters on Tuesday.

The right-wing government formed by the Civic Democrats earlier this month lacks a parliamentary majority and needs opposition support for the budget to go through.

The government on Monday approved a central state budget deficit of 91.3 billion crowns ($4.11 billion).

Former Finance Minister Bohuslav Sobotka said the goverment had met his party's condition that the budget gap must not exceed 100 billion crowns, and also that the overall public sector fiscal gap under EU accounting rules does not breach 4 percent of gross domestic product.

"I believe this opens room for negotiations to continue," Sobotka, who is also a Social Democrat vice-chairman, told Reuters by telephone.

However, his party is also demanding the government does not sell shares in power company CEZ <CEZPsp.PR> and instead finds other privatisation revenues to support budget income.

"We still do not agree with the sale of CEZ," Sobotka said.

He added that his party also demanded that the Civic Democrats drop their plan to propose in parliament a cut in excise tax on fuel and to push through a lower-than-planned hike in cigarette taxes.

He said these proposals were not accounted for in the budget and would make it untrustworthy.

If there is no budget in place by January, a provisional budget kicks in which locks discretionary spending at the levels of the previous year. Spending mandated by other laws can rise. ((Reporting by Jan Lopatka, editing by Gerrard Raven; prague.newsroom@reuters.com; Reuters Messaging: jan.lopatka.reuters.com@reuters.net; +420-224 190 474))

($1=22.22 Czech Crown)

Keywords: ECONOMY CZECH OPPOSITION