PRAGUE (Reuters) - The Czech lower house of parliament rejected a motion on Wednesday to dissolve itself and force an early election in September, setting up more months of political uncertainty.
The motion was proposed by the centre-left Social Democrats after leftist President Milos Zeman picked his long-time ally, Jiri Rusnok, last month to lead a new government against the will of the main political parties.
But there were only 96 votes in favour, short of the 120 needed to dissolve the 200-seat lower house, as centre-right parties rejected the idea in the hope that they might yet be able to form a new government themselves.
The clash between Czech parties and the president is threatening gridlock in policymaking, which could hold up a 2014 budget plan and rattle international investors, who have long viewed the EU country of 10.5 million as a safe haven.
Parties on both right and left say Zeman is defying constitutional conventions, but they differ on how to respond.
"Only a new election would give a chance to take the country out of its long-lasting and deep economic and political crisis," centre-left Social Democrat party leader Bohuslav Sobotka told the lower house.
But the former ruling centre-right still demands that the president give it another shot at forming a government.
"There is a majority in this house that can form a government and approve its budget," said Miroslav Kalousek, former finance minister and deputy chairman of the conservative TOP09.
Previous centre-right Prime Minister Petr Necas resigned last month after a close aide was charged with bribery and illegal spying. However, the Supreme Court dealt the investigation a serious blow on Tuesday.
Rusnok, who was finance minister in a Zeman-led administration a decade ago, faces a confidence vote early next month that he is likely to lose, although some leftist politicians have started to warm to him.
Zeman would then need to appoint another prime minister. If that one fails as well, the third nomination would be done by the head of parliament, a Civic Democrat.
But there are no clear time limits for Zeman to act, and all parties worry that he will be able to stall and to keep his man in power until the next parliamentary election, due in May 2014.
Zeman, who once led the Social Democrats but is no longer a member, was elected in the country's first direct presidential election in January and says he has a stronger mandate than predecessors chosen by parliament, allowing him to take bold action against the deeply unpopular centre-right coalition.
Additional reporting by Jason Hovet; Writing by Jan Lopatka; Editing by Robin Pomeroy and Alistair Lyon