BRUSSELS (Reuters) - Luxembourg faced the prospect of early elections being called on Wednesday, with a parliamentary debate about a spying scandal threatening to topple long-standing prime minister Jean-Claude Juncker's ruling coalition.

Juncker, who became prime minister in 1995 and is the European Union's longest serving head of government, is under scrutiny because of his alleged failure to curb abuse of power by the secret service.

The next parliamentary election is due in May 2014. However, it could be brought forward to October this year depending on the outcome of a marathon debate scheduled from 2 p.m. (8:00 a.m. EDT) on Wednesday.

Luxembourg's parliament will review a report it commissioned on the security agency's illegal bugging of politicians, purchase of cars for private use and allegations it took payments and favors in exchange for access to local officials.

The report concluded that Juncker had limited control over the agency despite being the responsible minister and that he failed to inform either the parliamentary committee of control or justice authorities about its operations.

All members of the inquiry committee, except for Juncker's center-right CSV party, voted in favor of the report last Friday. Coalition partners, Labor, also backed the report.

Claude Meisch, president of the opposition Democratic Party, said Wednesday's debate was likely to show Juncker's government no longer had majority support.

"Either Mr Juncker will present his own resignation or that of the government or there will be a vote on a motion to do the same," he said in a telephone interview.

The Labor party said it did not rule out early elections.

Juncker himself gave a hint as to thoughts on Friday evening at an event at a school in the town of Esch.

"I am happy that I can engage in one of my last acts in my current position in Esch," Juncker said.

Wealthy Luxembourg, a major financial hub, is one of Europe's most politically stable countries. The CSV has led all but one government since World War Two.

The CSV and its Socialist coalition partner hold 39 of the 60 seats in parliament.

(Reporting by Philip Blenkinsop, Robert-Jan Bartunek and Michele Sinner, Writing by Philip Blenkinsop; Editing by Alison Williams)