Jan Peter Balkenende, Dutch prime minister, whose centre-right coalition resigned last week following a row over the citizenship of anti-Islam campaigner Ayaan Hirsi Ali, will lead a minority government ahead of a general election in the Netherlands that is likely to be held on November 22.
The decision, announced on Wednesday,allows the presentation of a full 2007 budget in September but may trigger controversy over the minority government's policy plans. The budget is expected to include a [euro]1bn tax break for business and consumers.
Opposition parties had demanded that consideration of "controversial issues" should be left until after the general election. They are aware too that policies agreed in a budget cannot easily be undone by a new government.
Opinion polls predict that PvdA, the social democrat opposition, will emerge as the largest party in the general election, thereby leading the process of forming a new government.
The rump cabinet comprises Mr Balkenende's Christian Democrat Alliance and the liberal VVD - the two main constituents of the centre-right government which tendered its resignation on Friday.
It will see the budget as a chance to cut the PvdA opinion poll lead, by flagging vote-winning policies that confirm the Netherlands is recovering fast from its most sustained economic depression since the second world war, Dutch political commentators said.
The PvdA said it would presentan alternative budget as part of its election campaign.
Ruud Lubbers, the former Dutch prime minister who led five days of talks that resulted in agreement among political leaders on the make-up of the interim coalition and probable election timing, urged Mr Balkenende to employ retraint on controversial issues, underscoring sensitivity on the opposition benches.
The government will have 71 seats, five short of a majority in the 150-seat lower house of parliament. D66, the centrist party whose resignation from government last week triggered the crisis, will support the budget, Mr Lubbers said.
D66 quit after demanding the government fire Rita Verdonk, the immigration minister. Mrs Verdonk had threatened to annul Mrs Hirsi Ali's citizenship then changed her mind when it emerged that the Somali-born former politician had not lied in her asylum application in 1992.