Following the decision of PM Ferenc Gyurcsány on Monday to sack the cabinet's unpopular liberal health minister, Ágnes Horváth, the junior coalition partner (SZDSZ) decided to withdraw its ministers from the government on the same day. This leaves the governing socialists in a minority in Hungary's National Assembly: six MPs short of the 194 required for the majority, a period of instability is likely to follow the cabinet's internal crisis.

Tensions have begun to grow following the referendum held on 9 March, when a record-high turnout of 50% resulted in an overwhelming majority rejecting fees for tuition at universities, doctors' visits and hospital overnight stays.

At the governing socialists' party-gathering on Saturday, PM Ferenc Gyurcsány declared, in a one and a half hour-long speech, that following consultations with the coalition partner, he decided to sack the liberal health minister, Ágnes Horváth, responsible for a number of unpopular decisions. Belying the words of the prime minister, János Kóka, chairman of the junior coalition party immediately called the prime minister's announcement unilateral and thus unacceptable for SZDSZ. Nevertheless, the decision was implemented on the morning of Monday, 31 March, and Ágnes Horváth is to leave office by 30 April, 2008. The executive committee of the liberal party subsequently decided to withdraw all its ministers and secretaries of state from the government, the two other members of the cabinet of Gyurcsány. Consequently the ministers of economy of the environment have been absent from the parliamentary session on Monday. János Kóka, the chairman of SZDSZ, on Monday accused the PM of abandoning the reform process in his speech in the National Assembly - his words were left unanswered by the cabinet.

The presidency of Fidesz - Hungarian Civic Union discussed the current situation on Tuesday, followed by a press conference of Tibor Navracsics, head of the parliamentary group of the main opposition party. Mr Navracsics said the cabinet's internal crisis was endangering Hungary's future, causing serious damage to the economy with its irresponsible quarrels over personal issues and positions. The head of the parliamentary group of Fidesz emphasized that the country is led by a government whose members are "irresponsible and cannot account for their decisions and their consequences. It is not enough to speak of economic growth, measures need to be taken to encourage it". Stability and reliability have to be assured for actors of the economy to invest and create jobs in Hungary, added Mr Navracsics.

"It is the economy that will suffer the most from the disagreement within the coalition. The social and political crisis may thus be soon followed by an economic one", declared the head of the parliamentary group of Fidesz.