One of Cyprus' ruling coalition parties quit the government Wednesday over economic reforms and ongoing peace talks to reunify the divided island, dpa quoted the Athens News Agency (ANA) as saying.
The move by the DIKO party, which is a coalition partner of the Communist AKEL, leaves President Dimitris Christofias with a minority in parliament, making it increasingly difficult to pass essential economic and spending reforms needed to combat an energy crisis which is threatening to plunge the island into a recession.
The pull-out by DIKO leaves the coalition with 19 seats in the 56-seat parliament. It was unclear how the coalition planned to proceed.
The political and economic crisis was triggered by an accidental blast of confiscated Iranian munitions at a naval base that killed 13 people and destroyed the island's biggest power station last month.
Public opinion towards the government deteriorated sharply after the explosion, as it was seen to have handled the crisis badly.
Christofias said he would reshuffle his cabinet in the next few days amid reports that the country may be forced to seek a bailout from the European Union.
Credit rating agencies Moody's and Standard and Poor's both downgraded Cyprus' sovereign rating last week, causing borrowing costs to rise over concerns about the economic repercussions of the explosion, as well as the banking system's exposure to Greece.
Reports said the pullout by DIKO also leaves Christofias at a disadvantage in UN-led peace talks to reunify the island, where he will need the support of his political allies.
DIKO and another coalition partner, the socialist party EDEK, have long been at odds with Christofias over this handling of peace talks, urging him to withdraw proposals that envision the Greek and Turkish communities to share future governance via a rotating presidency.
Cyprus has been divided into a Greek Cypriot south and Turkish Cypriot north since 1974 when Turkey invaded the north in response to a Greek-led coup.
Only the internationally Greek Cypriot south is a member of the European Union.
Both sides have agreed in principle to reunite the island under a two-zone, bi-communal federation.
UN Secretary General Ban Ki-moon has told both communities to reach an agreement by October, before the Greek Cypriots assumes the EU rotating presidency.
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