Istiqlal party quits Morocco's Islamist-led government Published duration 9 July 2013

image copyright Reuters image caption Istiqlal accused Prime Minister Abdelilah Benkirane of "acting like the head of a political party"

A key party in Morocco's Islamist-led government has quit, amid a dispute over subsidy cuts and economic policy.

The secular centre-right Istiqlal party said five of its six ministers had resigned. It is not clear if Education Minister Mohammed el-Ouafa has done so.

Istiqlal is the second-largest party in parliament after the moderate Islamist Justice and Development Party (PJD), which won elections held in late 2011.

The PJD will now have to find a new coalition partner or call elections.

Analysts say the first option is more likely.

Financial reforms

Announcing its withdrawal from the government on Tuesday, Istiqlal spokesman Adil Benhamza accused Prime Minister Abdelilah Benkirane of "acting like the head of a political party rather than the head of a government that represents the people", Reuters news agency reports.

Istiqlal, which controlled the finance ministry, has criticised the government's plan to cut by about 20% subsidies of basic goods, which cost about $6.16bn (£4.14bn), or 6.4% of GDP. The cuts are due to take effect at the end of the Islamic holy month of Ramadan, which begins on Wednesday.

The state has raised wages, pensions and spent more on subsidies every year since Morocco - ruled by the Arab world's longest-serving dynasty - saw protests over unemployment and living costs inspired by the Arab Spring revolts of 2011.

However, the government has recently been put under pressure to rein in spending and reduce its budget deficit from 7.1% to 3% by 2017 by the International Monetary Fund (IMF), which has granted it a $6.2bn credit line.

"The PJD wants to raise prices and hit the poorest, while we prefer to pick up some billions which are in the hands of speculators by controlling imports," Mr Benhamza told Reuters.

The PJD has accused Istiqlal of trying to sabotage reforms, the Associated Press news agency reports.

Morocco imports all of its oil, gas and coal, and relies on sugar and wheat shipments to meet domestic needs.

Mr Benkirane has said the IMF criticised the government last month for acting too hesitantly in implementing the financial reforms.

The government crisis in Morocco comes less than a week after Egypt's Islamist President, Mohammed Morsi, was ousted by the country's military.