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Shinui plans to vote against the budget if hundreds of millions of shekels are allocated to meet the demands of United Torah Judaism, Justice Minister Yosef Lapid informed Prime Minister Ariel Sharon yesterday.

In a telephone call to cabinet secretary Israel Maimon, Lapid said that in Shinui's view, the way to deal with the government's lack of a majority for the 2005 budget is by bringing Labor into the coalition. If this is not possible, then Sharon should call new elections. However, under no circumstances will Shinui accept a massive cash infusion to the ultra-Orthodox party's religious and educational institutions.

Lapid had intended to deliver this message to Sharon in person, at a meeting scheduled for today, but the meeting was canceled because Sharon lost his voice. Lapid therefore decided to transmit his ultimatum via Maimon.

But officials in Sharon's bureau appeared unfazed, saying Shinui's threats had been expected. "No one here is getting excited about this," said one. "If Shinui wants to hold elections and be the one that torpedoed the disengagement, it will wind up with six seats," down from its current 15.

In fact, the officials said, if Shinui quit the government, that would make life easier for Sharon, since he could then form a new government with Labor and Shas. Currently, Sharon is unable to form a new coalition because Shinui refuses to sit with an ultra-Orthodox party, while Sharon's Likud Party objects to a government with Labor that does not include a religious party. "So we advise Shinui not to make ultimatums," said one official.

Lapid's threat was sparked by media reports that the government is nearing an agreement with UTJ under which the latter would support the budget in exchange for the cancelation of some NIS 400 million to NIS 450 million in funding cuts to its institutions. The minister said that Sharon could not make an agreement with UTJ without talking to Shinui, and if the media reports were true, "Shinui will not agree to this kind of bribery. We cannot betray our voters, and we will not agree to renewed fund transfers to the Haredim after we succeeded in reducing them. We have a promise that no deal will be made with the Haredim behind our backs."

Though the Likud Central Committee voted against bringing Labor into the government, Lapid insisted that Sharon could get 30 of his party's 40 MKs to support such a move if he tried, and that is what he should do, "even at the price of an internal rift with the rebels" - the Likud MKs who oppose the disengagement plan.

But Likud sources scoffed at this assertion. Sharon has no chance of winning his faction's support for a Likud-Labor-Shinui government, they said, as few MKs would dare to vote against the central committee's decision.

For now, the Prime Minister's Office is continuing its efforts to persuade both UTJ and the National Religious Party to support the budget from outside the coalition. But ministry officials complained that following Labor Party Chairman Shimon Peres's declaration that his party is no longer committed to giving the government a safety net, UTJ raised its price - meaning that prospects for an agreement, which seemed imminent a few days ago, have now receded. But Sharon is keeping all his options open, they added, including that of obtaining support from Labor.

Finance Ministry Deputy Budget Director Yael Enderon met with UTJ faction chairman Yaakov Litzman yesterday, and Litzman later met with cabinet secretary Maimon and budget director Kobi Haber.

"There is a chance that if the negotiations succeed, we will vote for the budget," said MK Avraham Ravitz (UTJ). "We have a great deal of experience in this. We are in the final stages of negotiations."

But NRP faction chairman Nissan Slomiansky sounded less enthusiastic. "Our support for the budget very much depends on the treasury. If there is total agreement on the issues, we will vote for the budget; if not, we will vote against it."

The government is also courting opposition MKs Michael Nudelman (National Union) and David Tal (One Nation), as two Likud MKs, David Levy and Haim Katz, have threatened to vote against the budget.

Meanwhile, Labor is having its own troubles: an internal party spat over when to hold its leadership primary. Eight Labor MKs submitted a motion yesterday to the party's central committee to hold the primary on April 5. That contradicts the view of Peres and other senior Labor MKs, who do not want a date set yet. The central committee is slated to discuss the issue next Tuesday.

Labor sources attribute the senior clique's opposition to early primaries to two factors: a desire to foil the candidacy of former prime minister Ehud Barak, and the fact that Peres, in their view, has still not lost hope of joining the government.