Czech government talks break down in row over ministry posts

PRAGUE (Reuters) - The Czech Social Democratic party (CSSD) is ready to walk away from talks after the ANO party of Prime Minister Andrej Babis rejected its proposals on forming a coalition government, party leader Jan Hamacek said on Thursday.

Hamacek told reporters he would recommend his party leadership end talks with ANO when it meets on Friday.

ANO was the clear winner in an election last October, but lacks a majority in parliament where it lost a confidence vote in January, leaving it in a caretaker position as it scrambles to gain partners for a new attempt at forming a government.

After starting talks in February, the two parties had found common ground on an agenda, but still had yet to agree on cabinet posts.

"ANO refused our constructive offers ... We have nothing left but propose at tomorrow's leadership meeting to end talks with ANO on government cooperation," Hamacek said.

The party had sought the Interior or Finance Ministry as Babis, a billionaire businessman, is faced with pending criminal charges over an alleged fraud a decade ago involving European Union subsidies worth 2 million euros. He has denied any wrongdoing.

But other parties have refused to cooperate with an ANO government led by Babis, although the Social Democrats said in late March they would be willing to join his cabinet if they controlled one of the ministries they sought.

Speaking afterward, Babis said his party offered up to five ministries, including the Justice Ministry.

"I think that our (party) has shown great flexibility and tolerance," he told reporters. "We have done our best. The stance of CSSD surprised us, we are sorry for that and unfortunately, our generous offer was not accepted."

(Reporting by Robert Muller and Jason Hovet; editing by Andrew Roche)