Belgium in limbo again after government collapses

By Philip Blenkinsop

BRUSSELS (Reuters) - Belgium's King Albert consulted political leaders on Saturday after the government collapsed for the third time in a year following its botched attempt to bail out financial group Fortis.

Prime Minister Yves Leterme tendered his government's resignation on Friday after a report by the Supreme Court found signs of political meddling to sway a court ruling on the future of the bank, a victim of the credit crunch.

The king, who under the constitution must decide whether to accept the resignation, held successive talks at the palace with the heads of the five ruling-coalition parties until 2 a.m. on Saturday, a palace spokesman said.

He resumed consultations later on Saturday when outgoing Justice Minister Jo Vandeurzen arrived. The presidents of the two houses of parliament were also expected to join.

Leterme has been in office for only nine months. Belgian media said there was little chance he would last any longer.

The prime minister has led a fragile, five-party coalition and failed to resolve disputes between Belgium's linguistic groups that threaten the break-up of the 178-year-old country.

Opposition parties demanded a new parliamentary election, although analysts doubted the parties in Leterme's coalition would want to test voters just as Belgium slips into recession, and with the Fortis debacle fresh in their minds.

Newspaper De Morgen said a reshuffled, emergency cabinet could be stitched together to govern until June. A parliamentary election could take place that month to coincide with planned regional and European elections, the paper said.