By Maja Zuvela
SARAJEVO (Reuters) - One of Bosnia's two regional governments was on the verge of collapse on Friday just three months after it was formed, potentially dealing a fresh blow to Western hopes of reform in the former Yugoslav republic.
Four ministers of the Democratic Front, the junior partner in the government of Bosnia's autonomous Bosniak-Croat Federation, resigned after the party was overruled in a decision on how to appoint managers to public enterprises.
The region's prime minister Fadil Novalic held out hope of keeping his government alive, telling state radio: "We'll see if some kind of new coalition will be formed."
But the political turbulence does not bode well for a new initiative by the European Union to encourage much-needed economic and eventually political reform in Bosnia after years of stagnation.
Bosnian Serbs have already rejected a reform agenda sought by the EU.
An unwieldy system of ethnic power-sharing created to end Bosnia's 1992-95 war has slowed reforms, stifled development and left the country trailing its ex-Yugoslav peers on the road to EU membership.
Democratic Front leader Zeljko Komsic told the Bosnian daily Dnevni Avaz: "From now on, we are not a part of the government and parliamentary majority."
But in a sign the party may yet cooperate with the government, Trade Minister Aleksandar Remetic, who was among the four who resigned on Friday, said the party still intended "to support all reform laws for the benefit of the federation and the state".
The governments of Bosnia's Federation and Serb Republic, the country's two autonomous entities, wield significant powers and are joined only by a weak central government that is frequently paralysed by nationalist politicking.
The cause of Friday's fallout was disagreement over how the Federation government would decide appointments to state firms, a rich source of money and patronage for political parties in Bosnia.
(Reporting by Maja Zuvela; Editing by Matt Robinson and Tom Heneghan)