Czech Prime Minister Petr Necas said on Wednesday he would seek an early election in June if his government did not find a clear majority in parliament after a junior partner split just a week after the coalition parties clashed over the budget.
Deputy Prime Minister Karolina Peake and her allies left the centrist Public Affairs party on Tuesday, although she stayed in the cabinet, raising the possibility her faction may stay with the coalition while the rest may quit.
The faction would have to be large enough to give the cabinet over 100 votes in the 200-seat lower house, which analysts said was likely but not yet confirmed.
If I do not have clear knowledge by Monday that the government has a safe majority, the proper solution will be to call an election in June, Necas told reporters.
An early election would be likely to bring the centre-left opposition Social Democrats to power, according to opinion polls.
Only last week, the leaders of the three parties in the coalition agreed on tax hikes and budget savings for 2013-14, bridging a rift that had also threatened to topple the centre-right cabinet less than halfway into its four-year term.
Public Affairs, the smallest coalition member, had demanded a cabinet reshuffle, but the focus quickly morphed into negotiations on austerity measures.
The agreement to help cut the budget deficit to below 3 percent of gross domestic product next year confirms the central European country's staunch focus on fiscal austerity, which has hurt growth but won it confidence in financial markets.
Public Affairs has been the unstable element in the coalition since it was formed after the 2010 election on the platform of tight budgets and savings in the pension and welfare systems.
The party has been riddled by scandals involving its most influential leader, Vit Barta, who was given an 18-month suspended sentence last week for bribing party colleagues to keep their loyalty.
Barta, a party rival of Peake, appealed against the verdict and left the party's caucus, but retains his behind-the-scenes influence.
Necas said he could no longer cooperate with the faction led by Barta, a wealthy businessman who has long irked coalition partners by his former ownership of a detective agency that, among other work, followed politicians in the past.
I will not accept that the government would rule thanks to cooperation with a caucus ... de facto managed behind the scenes by a person found guilty of corruption, Necas said.
Without Public Affairs, the two remaining government parties can rely on 92-93 seats in parliament, so they would need at least eight or nine of Public Affairs' 21 deputies to join the Peake faction to secure a majority.
Czech media reported five to six deputies had already declared allegiance to Peake, a trained lawyer in charge of anti-graft policy, and one of them said she was sure enough others would follow. The party's two remaining cabinet members also joined Peake.
(This version of the story has been corrected to fix the day of the week in the first paragraph)
(Reporting by Robert Muller; Writing by Jan Lopatka; Editing by Michael Winfrey and Alison Williams)