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During his meeting Saturday evening with Prime Minister Ariel Sharon, Shinui leader Yosef Lapid said that his party would not support the budget plan in Knesset votes on its second and third readings. The two met at Sharon's Sycamore Ranch home.

Shinui recently proposed that Sharon begin negotiations dealing not only with support for the budget, but also regarding the party's return to the coalition, or its support from the opposition. Shinui opposes the budget, due to the NIS 290 million allocated to ultra-Orthodox educational institutes, given in exchange for United Torah Judaism joining the coalition.

Lapid said that Shinui cannot support the budget, over which it left the coalition last year. Lapid declined to say whether his party would consider abstaining from the vote.

Lapid told Sharon that he believes that the proper thing to do at this juncture is establish a "secular coalition" comprised by Likud, Labor, and Shinui. Sources in Shinui believe that such a coalition is necessary, in light of the opposition of Likud rebels to the budget.

Lapid and Sharon were originally set to meet Saturday afternoon but due to the objection of MKs from the ultra-Orthodox faction United Torah Judaism, the meeting was postponed until later in the day.

Former Shinui minister Joseph Paritzky said in response to reports on the meeting that, "Lapid's renewed crawling toward the coalition shows he has totally lost his way. One can support the disengagement and still remain in the opposition."

Sources in the Prime Minister's Office said ahead of the meeting that they had been working intensively to attain a parliamentary majority for the budget, and that they would appeal to Shas in an attempt to convince the ultra-Orthodox party to change its position. A date for the Knesset vote on the budget has not yet been determined.

Shas informed Sharon this week that it would vote against the budget. The position of party chairman Eli Yishai, backed by the party's spiritual leader Rabbi Ovadia Yosef, is that the party cannot support the budget without the cancellation of the cuts in children's allowances.

Despite the differences of opinion, Sharon and Lapid agreed meet again.