PRAGUE (Reuters) - Czech lawmakers resume debate on Tuesday ahead of a confidence vote on Prime Minister Andrej Babis's minority government that he is likely to lose with the billionaire businessman fighting allegations of EU subsidy fraud.
Babis's ANO party won election in October by a wide margin but short of an absolute majority, with just 78 of 200 seats in the lower house.
His government is expected to be rejected by parliament, but stay in office until a new one is formed, possibly led by him again as he remains popular due to pledges to weed out corruption and run government with a businessman's touch.
But his situation could be complicated by a presidential election that is heading to a tight run-off on Jan. 26-27, pitting incumbent Milos Zeman, who has backed Babis, against Jiri Drahos, who has said it would be unacceptable to have a sitting prime minister who faces criminal charges.
Presidents appoint prime ministers in the Czech Republic, and Zeman's first term ends on March 7.
Babis has so far failed to find coalition partners due to a police investigation into whether he illegally received a 2 million euro European Union subsidy a decade ago by hiding ownership of a farm and conference center.
The lower house unexpectedly adjourned its session last week to give more time for a parliamentary committee to make a recommendation on whether to lift Babis's immunity from prosecution that he is granted as a member of the chamber.
Babis was handed over to investigators earlier and charged but the charges were blocked by his re-election to parliament, which now must decide again whether he is entitled to immunity.
Babis denies wrongdoing and says the allegations against him have been fabricated by political and business opponents.
He is due to appear before parliament's immunity committee on Tuesday. Debate in the lower house also starts although it is uncertain whether the confidence vote would ensue the same day - it could come later in the week.
Most parties in the Czech lower house say the government should not be led by a person facing investigation. Some have wider objections to conflicts of interests Babis has as the founder of a $4 billion business empire and a top politician.
Babis, however, packs more popular appeal than rivals. He has pledged to boost infrastructure investment, reform pensions and digitalize the state to make it more efficient while also boosting the country's voice in the EU.
He is the central European country's second richest person through the Agrofert conglomerate, which houses numerous firms in food, farming, chemicals and media.
Last year he put his holdings in a trust fund to comply with conflict-of-interest laws.
(Reporting by Jason Hovet; editing by Mark Heinrich)