India's left parties to meet over India nuclear deal

By Alistair Scrutton

NEW DELHI, July 4 (Reuters) - The leftist parties that prop up India's troubled government will discuss on Friday when they could withdraw support from the ruling coalition over a civilian nuclear deal with the United States that they vehemently oppose.

Scrambling to avoid snap elections if the left withdraws, Prime Minister Manmohan Singh is trying to get support from a north Indian regional party to secure a parliamentary majority for his Congress party-led ruling coalition.

Some leading communist party officials say they could announce their withdrawal if Singh formally seeks approval for the deal from the International Atomic Energy Agency (IAEA), a key step needed to make it operational.

"We will withdraw if they go to the IAEA, it's our decision," Nilotpal Basu, a leader of India's largest communist party, the Communist Party of India (Marxist), or CPI-M, told Reuters late on Thursday.

Other leaders have hinted they could withdraw if Singh heads to a G8 summit in Japan next week, where he will likely meet U.S. President George W. Bush -- the man who shook hands with Singh over the accord at the White House in 2005.

Either way, it looks increasingly likely that Singh will press ahead with the landmark accord, moving India's trade and diplomatic relations closer to the West.

Frustrated after four years of stymied reforms due to leftist opposition, Singh now seems to want to secure his legacy before the end of his term, even if some experts say time has run out for U.S. Congress to pass the deal before Bush leaves office.

The result could lead to months of electioneering and political bickering just as investors are seeking tough decisions on a trillion-dollar economy that faces inflation at a 13-year high, rising interest rates and signs of an economic slowdown.