STOCKHOLM (Reuters) - Sweden's prime minister said on Tuesday he might quit his post if the opposition wins a budget vote on Wednesday with support from the anti-immigration Sweden Democrats.
The threat of a budget defeat has overhung the minority center-left government of Stefan Lofven since it took power just two months ago.
Shunned by other parties, the Sweden Democrats hold the balance of power in parliament and could push through a budget to be put forward by the four-party centre-right Alliance, meaning the government's finance bill would fail.
"It is out of the question that I stay on to administer it if that budget were to win," daily Dagens Nyheter quoted Lofven saying.
On Swedish TV, Lofven was less clear, saying his resignation was one of several options should the Sweden Democrats say they will support an opposition budget. "It depends on how the four Alliance parties respond to this," he said.
"We have always been open ... for cooperation in order to prevent the Sweden Democrats having a decisive influence in Swedish politics," Lofven told broadcaster SVT.
The Sweden Democrats, Sweden's third largest party, will announce a decision later on Tuesday. In Sweden, each party or coalition can put forward a budget proposal and the one backed by the most votes wins.
Lofven's Social Democrats and their allies the Greens do not have the votes to force a budget through parliament against a united opposition even with backing from the Left Party, but the prime minister still has options.
He could send the budget back to committee to be reworked to get backing from the centre-right.
Should the Alliance refuse to compromise, they could be seen as tacitly supporting the Sweden Democrats, risking voters' ire.
"The spotlight would be on the Alliance," said Peter Esaiasson, professor at Gothenburg University.
Lofven could also resign and try to broaden his government to get a parliamentary majority. But the four centre-right parties have rebuffed Lofven's post-election overtures.
A last resort would be to call a snap election, causing a period of political and market uncertainty. Analysts say none of the parties have much to gain from that option.
The centre-right and center-left are running neck and neck in polls, but the biggest opposition party, the Moderates, effectively lack a leader. The Sweden Democrats' charismatic chairman, Jimmie Akesson, is on long-term sick leave.
Reporting by Johan Sennero and Anna Ringstrom; Writing by Simon Johnson; Editing by Catherine Evans