Responding to an ultimatum issued by his junior coalition partner, which said its ministers may resign as early as Wednesday unless he met their demands, Necas warned Public Affairs to weigh their next step carefully.
"The moment their ministers hand in resignations, any room for talks ... on the continued cooperation of the current three coalition parties evaporates," Necas, who is due to push through an austerity budget shortly, said in a statement.
"If this political situation should lead to the collapse of this government, a new election is necessary as soon as possible ... for the (2013) budget and the credibility of the country," he said.
Necas conceded that a snap election was not his preferred option, however.
The coalition could in theory continue governing as a minority government, although that would seriously hamper its ability to deliver savings and tax hikes it needs to cut the budget deficit below 3 percent of gross domestic product next year - its key target.
Radek John, the leader of Public Affairs, had earlier told Necas to take specific steps to regain public confidence by April 26, including proposing a new cabinet and asking for a vote of confidence.
He also demanded reforms to both the justice and social security systems. Only after those steps were taken would his party decide whether it wanted to stay in the coalition, he said.
If his ministers did resign as early as Wednesday, he said they would formally quit the government on May 1.
Public Affairs has threatened to leave the government several times before, only to reconsider.
If it did carry out its threat this time, it would usher in a period of political turmoil at a time when the Czech Republic is pushing through difficult reforms designed to cut its budget deficit.
The spat is the most serious threat to the centre-right coalition since it took office in mid-2010, though the government would not automatically collapse if Public Affairs left the coalition. Nor would fresh elections ensue immediately as they would need to be agreed among parties.
The coalition has won praise from investors and rating agencies for cutting the budget deficit and initiating reforms in the pension, welfare and health sectors. Ordinary voters have been less enthusiastic about the reforms, however.
WEAK LINK
Public Affairs has been the weak link in the coalition since 2010, torn by internal rows and clashing frequently with Necas's centre-right Civic Democrats and the conservative TOP09 party.
The newly formed party won 10.9 percent of the vote in 2010, promising to weed out corruption in the political elite that rules the central European country of 10.5 million people.
But it was soon engulfed by a series of sleaze scandals itself. Vit Barta, its most influential official, has been charged with bribing party members to keep their loyalty. A court is expected to rule on the case in the next two weeks.
So far, the coalition has held together, mindful of opinion polls suggesting its members would suffer a clear defeat in an early election, handing power to the centre-left Social Democrats.
Surveys suggest that Public Affairs would stand almost no chance of crossing the 5 percent threshold to win parliamentary seats next time.
Finance Minister Miroslav Kalousek of the TOP09 party was scathing about the junior partner.
"An early election cannot bring anything good, but it is better than agony. It would have one positive aspect, and that is that something as revolting as Public Affairs would disappear from the political scene once and forever," he said.
Political analyst Borivoj Hnizdo said the threat to pull out of government looked like brinkmanship.
"Public Affairs is losing support, so I think it's an attempt by them to be in the media. Politically, from the domestic point of view, it's not as dramatic as it looks," he said. "Even in a situation in which they would leave the coalition, they would support a minority government."
(Additional reporting by Michael Winfrey and Jason Hovet; Writing by Jan Lopatka; Editing by Andrew Osborn)
Reuters
