RPT-Main Czech parties launch new coalition talks

(Repeats story published late on Tuesday)

By Jan Lopatka

PRAGUE, Nov 28 (Reuters) - The two biggest Czech political parties agreed on Tuesday to launch fresh talks on forming a coalition government, in a new attempt to end nearly six months of political deadlock.

An inconclusive June election handed 100 seats to leftists and 100 to centrist and right-wing parties in the lower house.

A minority cabinet of right-wing Civic Democrats has already lost a confidence vote, and the party's attempt to form a temporary four-party coalition with the leftist Social Democrats, centrist Greens and Christian Democrats failed on Sunday when the Social Democrats refused to take part.

Civic Democrat chief and Prime Minister Mirek Topolanek met Social Democrat leader Jiri Paroubek on Tuesday and both said they would try to reach a compromise on a government programme.

"We agreed that our talks could be relatively fast, we began to discuss programme issues, programme foundations of a potential coalition government which we would take part in," Paroubek said.

The talks are due to start on Wednesday.

"It is politicians' duty to try to form a reform-minded government in the second attempt and I will try that," said Topolanek.

The Social Democrats offered to form a three-party cabinet excluding the Greens which would last at least three years and carry out reforms allowing the country to adopt the euro by 2012.

The Civic Democrats have said they still want four parties to be a part of an agreement on a new government, though not all had to take cabinet seats.

Topolanek, whose party has favoured an early election, said after meeting Paroubek that the length of the government mandate would depend on the range of reforms the parties agreed on, as more reforms would justify a longer rule.

The Czech Republic has benefited from fast economic growth but needs to revamp its health, pension and social systems to slash mounting budget deficits which have made it impossible to join the euro zone by 2010 as previously planned.

A source close to the negotiations said there were signs of progress in the latest talks. "... I do not want to be prematurely optimistic but definitely there has been a step forward," the source said, speaking on condition of anonymity. (Additional reporting by Jan Korselt) ((editing by Tim Pearce; prague.newsroom@reuters.com; Reuters Messaging: jan.lopatka.reuters.com@reuters.net; +420-224 190 474))

Keywords: CZECH POLITICS/