The late strongman Slobodan Milosevic's Socialist Party (SPS) on Sunday backed away from a deal with the opposition Radicals and nationalist Democratic Party of Serbia (DSS) to rule Serbia's capital Belgrade, dpa reported.
The Socialists' main board decided "that the coalition with DSS and Radicals would jeopardize the survival of Serbia's government," Socialists leader Iviva Dacic told reporters.
The pro-European block led by President Boris Tadic's Democratic Party and the Socialists formed a government last week, a month and a half after snap May polls.
The Socialists first began talks on forming a government at both local and state level with the opposition Radicals and former prime minister Vojislav Kostunica's DSS. Four days after the polls they agreed to form a local government in Belgrade.
However, the Socialists were under pressure from Tadic to back away from the deal with the Radicals and the DSS, and Serbian media reported that Tadic told Dacic he would break up the coalition with the SPS at the state level if Belgrade fell into opposition hands.
After Sunday's session, Dacic warned that there is a possibility of new local elections since the Socialists cannot form a Belgrade government with the fiercely pro-European Liberal Democratic Party (LDP).
Tadic's Democrats and the LDP don't have enough seats in city hall for a majority and they need the Socialists.
Belgrade city hall is scheduled to meet on Monday and most probably will only verify the mandates of the representatives.