DHAKA (Reuters) - Bangladesh's main opposition party on Monday refused a request from the prime minister to form an all-party government to oversee upcoming elections, setting the stage for a showdown this week that could delay or even derail the polls altogether.
The tension is a fresh threat to the poverty-stricken country's garment export industry which has already been rocked by a string of deadly factory accidents over the past year.
The ruling Awami League in 2011 scrapped a "caretaker government" system - whereby neutral leaders take over three months before elections and oversee polls - and is now refusing to step down by October 24, as should have happened ahead of elections due to be held by January.
Last week, Prime Minister Sheikh Hasina sought to defuse the crisis, offering the formation of an all-party government to see through the elections with her staying head of government.
Khaleda Zia, head of the opposition Bangladesh Nationalist Party (BNP), instead proposed a 10-member caretaker government.
"(Hasina's) proposal showed more concern about the date of elections rather than who would lead the government," Khaleda said.
The BNP said its supporters would whip up nationwide strikes that are likely to be bloody if the government does not relinquish power. It is also threatening to boycott the elections.
Former military ruler Hussain Ershad, chairman of the Jatio Party, a ruling coalition partner, said it would not participate in the election if the BNP did not take part, as the election would not be seen as credible at home or abroad.
"There will be a total deadlock," Mirza Fakhrul Islam Alamgir, the BNP's acting secretary-general, told Reuters. "When the government does not listen to our demands, what is the alternative?"
Sayed Ashraful Islam, secretary general of the Awami League, said the party would respond to the BNP proposal within days.
(Reporting By Serajul Quadir; Editing by Nick Macfie)