KIEV, Dec. 13 ??“ Tensions rose sharply between President Viktor Yushchenko and the government on Wednesday after the Cabinet had warned the presidential veto on the 2007 budget would cause economic instability and political crisis.

The government issued a tough-worded statement calling the presidential veto ???a populist move??? that would cause the crisis amid ???illusions of possible dismissal of Parliament and early election.???

Yushchenko, currently on a visit to Estonia, responded with calls for reaching a compromise with the government to increase minimum wages and pensions, the president??™s major budget concerns.

But Prime Minister Viktor Yanukovych, shortly before leaving for Kazakhstan, said the compromise was unlikely. ???Honestly speaking, I practically don??™t see [the compromise],??? he said.

The developments highlight the sharpest escalation of tensions between the pro-Western president and pro-Russian government since early August when the government has been formed.

The tensions were rising after controversial constitutional amendments earlier this year had switched many presidential powers, such as the right to appoint and to dismiss ministers, to the pro-government coalition.

Although the constitution still lets the president define the foreign policy by nominating foreign and defense ministers, Yanukovych has been seeking to get the final say in those policies too to postpone Ukraine??™s accession to NATO.

Analysts said the standoff between the president and the government could lead to the dismissal of Parliament and to early election within the next year.

???I don??™t want to be a good or bad prophet, but if the situation keeps developing this way I absolutely don??™t rule out the dismissal of Parliament in the spring,??? said Petro Poroshenko, a senior member of Our Ukraine, Yushchenko??™s party.

Among other powers, Yushchenko has the power to dismiss Parliament if the government hasn??™t been formed within 60 days after the creation of the pro-government coalition.

The pro-Russian government coalition recently dismissed Foreign Minister Boris Tarasiuk, a key backer of Ukraine??™s pro-Western foreign policy. The dismissal is currently contested in court.

Should the court back the dismissal, Yushchenko may again nominate Tarasiuk to the same post, which would most likely be rejected by Parliament.

The vacancy in the government may be interpreted as the government hasn??™t been formed, which would give Yushchenko the power to dismiss Parliament, analysts said. (tl/ez)