Polish ruling party decides on election Saturday

WARSAW, Aug 10 (Reuters) Polish Prime Minister Jaroslaw Kaczynski's Law and Justice (PiS) party will tomorrow decide whether to heed opposition calls for an early election, party officials said.

The opposition has demanded an early parliamentary poll to end a month-long crisis in the three-party ruling coalition.

''The number one topic will be the disintegration of the coalition,'' Marek Suski, a senior Law and Justice figure, today told Reuters by telephone. ''We will surely discuss the proposal to hold an early election.'' Yesterday, the chances of a poll two years ahead of schedule rose when the prime minister's twin brother, President Lech Kaczynski, backed the idea in a meeting with the head of the biggest opposition party, Donald Tusk.

Opinion polls show Tusk's pro-business Civic Platform leads Law and Justice by 10 to 12 percentage points.

Since coming to power in 2005, the Kaczynskis have presided over fast economic growth in the nation of 38 million but also political turmoil and squabbles with European Union partners.

Financial markets have ignored the turmoil so far. Many analysts hope an election soon could bring in a more reform-minded government than the Eurosceptic trio in power now.

''If indeed the elections do happen and the results are similar to the current opinion polls, it would be rather positive,'' David Heslam, director of emerging Europe sovereign team at debt ratings agency Fitch, told Reuters.

COALITION NOT DEAD? The latest crisis erupted when Jaroslaw Kaczynski sacked his deputy and junior opposition party leader Andrzej Lepper from the cabinet, putting his majority in parliament in jeopardy ahead of the next parliamentary session on August. 22.

Kaczynski has sought to persuade Lepper's Self-Defence party and the third coalition partner, far-right League of Polish Families, to stay but both have set tough conditions.

They want Kaczynski to step down and agree to a parliamentary probe into Lepper's sacking.

Kaczynski fired the firebrand farm leader over a corruption investigation into a land sale but has so far provided little evidence Lepper was implicated.

Lepper says the case was orchestrated by Kaczynski to remove him from politics and take over his party.

Analysts say the two junior partners may yet try to revive the coalition because opinion polls show they could become the biggest losers if an election was held now.

This is particularly true for the far-rightists, teetering on the 5 per cent threshold required to enter parliament.

Their leader, Education Minister Roman Giertych, said today he hoped the coalition could be glued together. He said all three party leaders should stay out of the reshuffled cabinet to make such a deal possible.

''I propose starting new coalition talks, which would result in a new government without Jaroslaw Kaczynski, Andrzej Lepper and myself,'' he told a news conference.

Analysts and party sources say Kaczynski is unlikely to accept anything short of total submission by the two parties and would rather go to the polls than meet their demands.

REUTERS AE BST2111