Hungary's liberal Free Democrats on Saturday rejected the Socialist government's tax programme, denying support that is vital if the plan -- a key part of the 2009 budget -- is to get through parliament.

"This is a programme for the survival of (Prime Minister) Ferenc Gyurcsany rather than the survival of the country," Gabor Fodor, president of the Free Democrats (SZDSZ), told a news conference at which he announced his party's decision.

The Socialists, ruling in a minority since the SZDSZ walked out in April, need the SZDSZ's support for 2009 tax and budget bills to pass parliament.

The tax plan is the cornerstone of next year's budget and Gyurcsany has said he will quit if the tax and budget bills do not get parliament approval.

Earlier on Saturday he had called on the SZDSZ in a newspaper interview to back the tax plan.

Fodor said his party was ready to launch talks with the government if it puts another programme on the table.

Gyurcsany has proposed a programme of tax cuts worth up to 1,200 billion forints ($7.58 billion) for the coming years, including a 300 billion forint reduction in 2009.

After unpopular tax hikes and subsidy cuts in the past two years to rein in a budget deficit, the Socialists trail opposition party Fidesz in opinion polls ahead of European Parliament elections next year and general elections in 2010.

The tax programme was a response to demands by SZDSZ and economists for cuts needed to kick-start the sluggish economy which is seen growing by only about two percent this year, well behind other central European countries.

But its critics say the programme lacks credibility as it would finance most of the tax cuts from an earmarked increase in tax revenues from the black economy.

"It's also unacceptable that the programme leaves the spending side untouched," Fodor added.

The net amount of the tax cuts would be about 145 billion forints next year or half a percent of gross domestic product as the excise tax and other minor taxes would increase.

Economists have criticised the plan, saying that the net tax reduction of the planned size would be little help to the economy, and only reductions in state spending could open room for further help to companies.

Gyurcsany has refused to cut spending including the highest social transfers in the region at around 18.4 percent of GDP.

"As I see, we cannot carry out a tax cut with significant spending cuts," he said in the interview.