UPDATE 1-Czech govt talks stalled, president cancels meeting

(Adds analyst, background)

By Jan Lopatka

PRAGUE, Nov 27 (Reuters) - Talks on forming a new Czech government stalled on Monday as President Vaclav Klaus cancelled a meeting with Prime Minister Mirek Topolanek, citing a lack of progress in building a ruling coalition.

Topolanek's efforts to form a cabinet hit a fresh obstacle late on Sunday, nearly half a year after June elections, when the leftist Social Democrats said they would not take part in his proposed four-party coalition. The cancellation of the planned meeting showed there will be no quick way out of the political crisis which has crippled policy making since the election gave right and left-wing camps 100 seats each in the lower house of parliament.

"After a telephone conversation this morning with Prime Minister Mirek Topolanek, which showed that negotiations on forming a new cabinet have not progressed so far, the president cancelled the meeting planned for noon (1100 GMT) today," a presidential spokesman said in a statement.

He gave no new date for the meeting. Topolanek's Civic Democrats said there were no further talks scheduled with their leftist rivals for the moment.

The crisis has not hurt fast economic growth nor the crown currency, but has prevented any agreement on reforms needed to rein in a deepening budget deficit and put the country on track to adopt the euro.

A minority cabinet of the Civic Democrats has lost a confidence vote, but it remains in power while Topolanek explores other possibilities.

An early election can be called if three consecutive attempts to form a cabinet fail. Topolanek's current talks are the second attempt.

He has proposed a four party-coalition and an early election in 2008. But the Social Democrats, weaker in opinion polls, have been arguing for a cabinet of just three parties and with a longer mandate, until 2009 or 2010.

Political analyst Josef Mlejnek Jr said he believed Topolanek would still try to forge some type of agreement.

"He himself would rather agree on a three-party coalition than risk a third attempt (to form cabinet)," he said.

The first two nominations for the prime minister are made by the president, a right-winger who appointed Topolanek both times. But the third prime minister-designate would be chosen by parliament.

Mlejnek said a congress of the small centre-right Christian Democrats on Dec. 9 could help determine the outcome.

A strong candidate for the party leadership, Jiri Cunek, has voiced support for the Social Democrat proposal of a government with a longer mandate, saying the alternative is early elections as soon as possible, daily Pravo reported.

((Reporting by Jan Lopatka, prague.newsroom@reuters.com; Reuters Messaging: jan.lopatka.reuters.com@reuters.net; +420-224 190 474, editing by Fredrik Dahl))

Keywords: CZECH POLITICS/