By Robert Muller
PRAGUE (Reuters) - The Czech Republic's governing coalition wants to continue in its current form but has not yet resolved a dispute over a threat from the junior ruling LIDEM party to quit, coalition officials said on Tuesday.
Persistent infighting among the three parties in Prime Minister Petr Necas's administration has cut its support to just 98 of parliament's 200 seats.
It has managed to push through crucial votes with the help of a handful of independent lawmakers but the potential departure of LIDEM could cause it to collapse only halfway through its four-year term.
LIDEM chief Karolina Peake said last month ministers from its small, centrist party would resign on January 10 after Necas sacked her as defense minister only days after her appointment.
But she signaled earlier this month that the party, whose popularity is close to zero in opinion polls, may back off its threat to quit, and coalition party officials said on Tuesday they wanted LIDEM to stay in the government.
"We have agreed on behalf of the coalition parties that we want to continue in the present coalition project," Martin Kuba, vice-chairman of Necas's Civic Democrats, told a news conference following a meeting of coalition officials.
LIDEM Vice Chairwoman Dagmar Navratilova said the threat of resignation remained open but negotiations were continuing. She added the party's decision should be clear later on Tuesday.
Necas and his ruling partners started their term in 2010 with a strong majority, raising hopes of sweeping economic reforms. But its parliamentary numbers have shrunk after a series of coalition rifts, a situation exacerbated by a recession that has eroded the ruling parties' popularity.
The government has raised taxes and cut welfare spending to slash a budget deficit that swelled in 2009 when the global economic crisis hit the Czechs' export-dependent economy.
The measures helped push the country back into recession last year, and now the government expects growth of just 0.7 percent in 2013.
(Reporting by Robert Mueller and Jana Mlcochova; Writing by Jason Hovet; Editing by Michael Winfrey/Mark Heinrich)