By Marton Dunai and Krisztina Than
BUDAPEST (Reuters) - A Hungarian newspaper usually loyal to Prime Minister Viktor Orban printed an attack against him on Thursday in a fresh salvo by the paper's co-owner who has turned on his former friend and threatens to undermine him.
Business magnate Lajos Simicska used to sit next to Orban at high school and played an integral role in his rise to power, while simultaneously building up his own business empire, which includes influential media outlets.
But their relationship appeared to sour after Orban was reelected in 2014, with the bad feeling breaking out into the open last Friday when Simicska launched a profanity-laced attack on him in several online interviews.
The businessman then left Hungary for a ski vacation, letting the feud fall silent until the publication on Thursday of weekly newspaper Heti Valasz, co-owned by Simicska, which said Orban's government had lost its way.
"The lack of strategy allowed tactical considerations to dominate, and common cause was replaced by seeking personal benefit," said the leader, written by the paper's editor-in-chief Gabor Borokai, who is a former Orban aide.
On the falling out between Orban and Simicska, the paper said: "An unpredictable tectonic shift, an elemental reorganization has started on the right wing."
A source familiar with the matter said the duo's ties frayed in mid-2014 because Simicska felt that Orban was trying to lessen his role by bringing new people into his inner circle.
The situation worsened after the government decided to tax advertising revenues in a way that cut into Simicska's profits.
Orban has a large majority in parliament and elections are not due until 2018, meaning that he is secure in power for now. But Simicska could use his inside knowledge of the ruling administration to undermine the prime minister's credibility.
The public row has come as popularity for Orban's Fidesz party appears to be in sharp decline -- dropping to 23 percent in January according to an Ipsos opinion poll from 37 percent when it won re-election last April.
Orban himself can ill-afford political strife as he tries to fend off criticism from Western allies over Hungary's perceived drift toward more authoritarian rule and its pursuit of closer ties with Russia -- another issue that has riled Simicska.
The editors of several of Simicska's media outlets resigned last week, apparently after they were told that they should start being critical of the prime minister.
Simicska did not respond to calls. A spokeswoman for Simicska's construction conglomerate declined to comment, and Simicska's office assistant said nobody other than the oligarch was authorized to talk about the matter.
Asked how the government was reacting to the row, a government source, who did not want to be identified, said: "Nobody is working on that here. It is absolutely irrelevant."
Simicska has no formal ties to Orban or his party, but people who know him say his influence was behind the scenes. A state secretary in the prime minister's office, and the head of the tax authority, are ex-executives with Simicska-owned firms.
"Orban was the political leader, Simicska in charge of the economy," said the source with knowledge of the matter.
(Editing by Christian Lowe and Crispian Balmer)