Dutch close in on government with anti-Islam party backing

AMSTERDAM (Reuters) - Pushing an austerity agenda, two right-leaning Dutch parties agreed Friday to have talks to form a minority government with support from an anti-Islam party five months after the last government collapsed.

The minority government -- a rarity in Dutch politics -- would include the Liberal Party (VVD), which narrowly won June 9 elections after a broader government collapsed over the Afghan military mission, and the Christian Democrats (CDA).

The Freedom Party (PVV), which wants to stop Muslim immigration and ban the Koran in the Netherlands, has agreed to back the minority government in the Dutch parliament, leader Geert Wilders said on Dutch NOS Radio 1.

The Christian Democrats had resisted forming a majority government with the PVV because of its hardline stance on Islam.

But Christian Democratic leader Maxime Verhagen said he was convinced the CDA and VVD could reach a pact that would do justice to CDA principles of freedom of religion and education.

"At the same time it is possible to come to a stable political cooperation which can have PVV's support," he told Dutch radio.

But Green Left leader Femke Halsema was scathing in her criticism. "It is unthinkable that VVD but especially CDA, with its constitutional views, are making themselves hostages of the PVV," she was quoted as saying by Dutch news agency ANP.

The Liberals and Christian Democrats would jointly hold 52 seats in the 150-seat parliament, short of a majority. But with backing from populist Wilders's Freedom Party, the coalition would control the 76 votes needed to pass laws.

If the Liberals and Christian Democrats succeed in forming a government, the Netherlands would echo Denmark, which also has a right-wing minority government often relying on support from the Danish People's Party, a right-wing, anti-immigrant party.

TOUGH ON THE BUDGET

While Dutch governments are usually majority coalitions, the new minority government talks arose after negotiations including the Liberals and Labour parties to form a broad left-leaning government stumbled on differences over budget cuts.

The Liberals want long-term cuts of up to 30 billion euros (24.9 billion pounds) to deal with a budget deficit that is expected to hit 6.3 percent of gross domestic product this year.

With the backing of Wilders, the right-leaning government is therefore expected to be tougher on the budget than other coalition options that have been explored since the election.

In the event of a minority government deal the VVD and CDA will also honour Freedom Party wishes over immigration, immigrant integration, public safety and care for the elderly, while the Freedom Party will support the austerity measures.

The Liberals narrowly won the June 9 election, while the Freedom Party showed the biggest gains in parliamentary seats.

The Christian Democrats lost half their seats to come forth in the elections, but have been in governments since the party's creation in 1977 apart from a hiatus between 1994 and 2002.

It is not clear who would lead the potential new government. Liberal leader Mark Rutte was expected to be the new prime minister, but he has also said in the past if there was a minority government, the leaders of the coalition partners should remain in parliament.

(Additional reporting by Aaron Gray-Block; Editing by Michael Roddy)