Although the government is in no immediate danger of being toppled - despite losing its parliamentary majority with the resignation of two rightwing ministers - the official on Wednesday said it would have to be restructured.

"We will have to bring the Labour party in sooner or later to provide the necessary parliamentary majority for the approval of the plan," the official told journalists on condition of anonymity.

Prime Minister Sharon's teetering coalition suffered a new blow on Tuesday when the National Religious Party's (NRP) leader Effi Eitam quit the cabinet, where he had served as housing minister, in protest at Sharon's plan to withdraw from the Gaza Strip.

While another NRP deputy, Zevulun Orlev, decided to remain in the cabinet as social affairs minister, his party colleague and junior minister Yitzhak Levy also quit the government, leaving Sharon with the theoretical support of just 59 members of the 120-seat Knesset.

Even before Tuesday's resignations, Sharon's majority in the parliament was down to a bare minimum after the premier kicked out another rightwing pro-settlement party, the National Union.
 
Political calculations

The parliamentary arithmetic is further complicated as many Likud deputies' loyalty has been stretched to the limit by Sharon's decision to push ahead with the evacuation of all 21 Jewish settlements in Gaza and four in the West Bank even though party members rejected his plan in a referendum last month.

Labour party chief Shimon Peres
backs settlement evacuations

But the left-wing opposition Labour party leader Shimon Peres told public radio on Wednesday that he was prepared to act as a "safety net" for Sharon's government.

"You cannot fail to be happy that Likud has renounced its deceptive dream of creating a Greater Israel, accepted the idea of dismantling settlements and the creation of a Palestinian state," Peres said.

Army radio quoted senior officials close to Sharon as saying he would not begin talks with Labour to set up a new broad-based coalition government until after the end of the current parliamentary session in two months.
 
Netanyahu warning

Finance Minister and former Premier Benjamin Netanyahu, however, fired a shot across his arch-rival Sharon's bows when he said that Labour's entry into the government would undermine the economy.

"Amir Peretz [Labour deputy and union leader] said yesterday that he would join the coalition with the purpose of fundamentally changing the economic policies of the government," said Netanyahu.

"Have we gone crazy? Do we want to regress a year and a half to the situation in which we were on the verge of economic collapse?"

Sharon's cabinet voted by a 14 to seven majority on Sunday in favour of his so-called disengagement plan. But mnisters stipulated that further votes would have to be held in cabinet before any phase of the evacuation process could take place.