Serbia's Socialist Party meets this weekend to decide whether to seal a coalition deal with the nationalists or switch allegiance to the liberals and help form a pro-Western government.

An inconclusive May 11 election left Serbia split between hardliners led by the Radical Party and liberals led by the Democratic Party. The Socialists of late autocrat Slobodan Milosevic hold the key to any coalition.

The make-or-break issue is whether Serbia pursues EU membership or shelve its bid until the EU stops backing the independence of Kosovo, whose Albanian majority seceded from Serbia three months ago with EU backing.

Senior Socialist official Branko Ruzic said talks with the nationalists were on ice until his party got a clear answer on the Stabilisation and Association Agreement, a pact offered to Serbia by the EU as a sweetener just before the election.

"The SAA is the main issue, and there talks stopped," Ruzic told private station TV Pink. "We are waiting for clarification, it'll be the only topic for further discussions."

The nationalists want to annul it and freeze Serbia's EU membership bid until the EU revokes recognition of Kosovo. The Socialists' stance is similar to the Democrats', who say only a strong and prosperous Serbia in Europe can defend its interests.

The pro-EU bloc is confident the Socialists' deliberations later in the day and on Sunday will end in its favour.

"Socialist officials we spoke to won't yet declare this publicly, but 90 percent of them already decided to cooperate with us," said Mladjan Dinkic of the technocratic G17 party.

He said the shape of the new pro-European government should be clear by June 5, the earliest date a parliament can convene.

"At the third meeting of the new parliament we plan to ratify the SAA," he said. "All this will be by the end of June."

Once bitter critics of Milosevic's aggressive nationalism in the Yugoslav wars of the 1990s, the Democrats now indicate they will help their former rivals enter the mainstream and could water down reforms to accommodate the Socialists' agenda.

Several senior Socialist officials have made clear they welcome the chance to escape the past, but the rank and file of mostly elderly Milosevic loyalists are thought to be against an alliance with parties they consider lackeys of the West.

If a government is not formed by mid-September, the country will have to hold a repeat election.