Vienna (AFP) - Austria's new centre-right leader Sebastian Kurz called on Sunday for snap elections, setting up another nail-biting vote in Europe that could see the far-right win power.

Speaking after being unanimously appointed head of the Austrian People's Party (OeVP), Kurz called time on the governing coalition after months of in-fighting.

"The major decisions on the direction that this country takes must be taken by voters," Kurz told reporters in Vienna.

He said that he would meet on Monday with Chancellor Christian Kern and the president to propose a joint parliamentary motion for elections to be held "after the summer".

Austria's unhappy "grand coalition" between Kern's centre-left Social Democrats (SPOe) and the centre-right OeVP is meant to govern until late 2018.

But after months of failing to agree much in the way of reforms to boost Austria's lagging economy, the head of the OeVP, Reinhold Mitterlehner, resigned last Wednesday.

Two days later Kurz, who aged only 30 is seen as the rising star of Austrian politics, called for the coalition to pull the plug.

Earlier on Sunday Kern, 51, who has been chancellor for just a year, had said he was resigned to Austrians going to the polls in the autumn.

The OeVP "made it quite clear that they don't want (to be in coalition) any more", Kern said on public TV.

- Nail-biter -

If the vote happens it will set up another tense election in Europe in 2017 following those in the Netherlands and France and others scheduled for Britain in June and Germany in September.

It could see Austria's populist Freedom Party (FPOe), currently riding high in opinion polls, enter or even lead a new coalition with the SPOe or the OeVP.

Last year the FPOe's Norbert Hofer, 46, who says Islam "has no place" in Austria, came close to being elected as Europe's first far-right head of state since 1945.

The FPOe's rise has mirrored that of other populist groupings in Europe on the back of concerns about immigration and terrorism and more established parties bleeding support.

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But while the post of Austria's president is largely ceremonial, the prospect of early elections gives the FPOe the chance of winning real power.

The party, led by social media-savvy Heinz-Christian Strache, 47, is running neck-and-neck with the SPOe on around 30 percent in opinion polls.

The OeVP is lagging behind in the low 20s. However surveys suggest that Kurz could revive his party's fortunes and even make it the most popular force.

- Haider 2.0? -

The last time the FPOe entered government was in 2000 after it came joint second with the OeVP in elections under flamboyant but controversial former chief Joerg Haider.

This prompted an outcry in Israel and Europe -- with even temporary EU sanctions -- that someone who could praise Hitler's "orderly" employment policies could be in office.

However the reaction is likely to be more muted this time because the party has toned down its rhetoric and because populists have gained ground Europe-wide.

So far neither of Austria's main parties has openly excluded the possibility of governing alongside the FPOe.

The OeVP meeting also approved giving Kurz extra powers in overhauling the chain of command and handpicking staff and election candidates, including from outside the party.

Kurz stressed that before the elections he wants the outgoing coalition to implement reforms that it has agreed on -- something also demanded by Kern.