VIENNA, July 7, 2008 (AFP) - Austria's troubled grand coalition of conservatives and Social Democrats called it quits Monday, as the vice-chancellor pushed for early elections after months of bitter wrangling.

Conservative Vice-Chancellor Wilhelm Molterer announced he would ask his party Tuesday to request early elections, saying the government was no longer capable of making joint decisions.

'Good work in the Austrian government is no longer possible. Therefore I call for immediate early elections,' he told a morning press conference.

Molterer blamed his coalition partners for abandoning the government's common EU policy, arguing they had 'parted ways with the rest of the federal government.'

'The SPOe (Social Democratic Party) lacks direction, lacks leadership and is in no state also to take care of government work,' he said.

Chancellor Alfred Gusenbauer and party leader Werner Faymann drew criticism last month, even among Social Democrats, when they unilaterally announced they would submit all European treaties to a referendum in Austria, apparently without consulting their own party.

Gusenbauer, meanwhile, announced Monday that he would not stand again in early elections, likely to be held in autumn, adding that Faymann would take his place on the ballot.

'We will prepare a list for the 2008 general elections, I suggested that Werner Faymann lead the Social Democrats' candidate list,' Gusenbauer told a press conference following a party meeting.

Gusenbauer was replaced by Transport Minister Faymann as head of his party in June, following a serious dip in opinion polls and poor results for the Social Democrats in local elections.

He stayed on as chancellor, however, even though the split leadership drew intense criticism even within the party.

'I can't stand aside and watch as the crisis in the SPOe becomes a crisis for Austria. Thus this step: immediate early elections, because that's what Austria needs,' Molterer told journalists Monday.

The Social Democrats struck back at his comments, however, blaming the conservatives for bringing down the government rather than trying to work together.

Faymann said he was 'disappointed' with the People's Party, while party secretary Doris Bures spoke of the conservatives' 'destructive power.'

'We're not afraid of early elections,' she added.

As late as last week, Faymann and Bures had insisted that Gusenbauer would stay on as the Social Democrats' leading candidate in next elections.

But Molterer's announcement prompted a swift about-turn on Monday as the prospect of a new vote became more concrete.

Gusenbauer said the conservatives and Social Democrats were now planning a 'joint dissolution procedure in parliament,' which could be filed as early as Tuesday.

If a motion for early elections is approved this week by parliament, before the summer break on Friday, a new vote could be held as early as September 14.

Molterer's conservative People's Party and Gusenbauer's Social Democrats have formed an uneasy government ever since January 2007.

In October 2006 elections, the Social Democrats narrowly defeated the conservatives with 35.3 percent of votes, ahead of 34.3 percent for the People's Party.

This gave neither a majority in parliament and forced them to form a 'grand coalition,' resulting in 18 months of bickering and but little progress on promised reforms, including on taxes and the health system.

This prompted regular strikes by doctors around the country while lorry drivers laid siege to the capital Monday, to protest high toll charges and fuel tax hikes.