The party of Yugoslav President Vojislav Kostunica has formed a shadow government in a move widely perceived as a challenge to the Serbian leadership.

Opposition parties form shadow governments

Gordana Comic Djindjic ally

Mr Kostunica's conservative Democratic Party of Serbia (DSS) stopped short of formally withdrawing from the ruling coalition to which it belongs, but said its "cabinet" would monitor the work of Serbian Prime Minister Zoran Djindjic's government.

Observers however said this effectively amounted to their joining the opposition.

Differences between Mr Kostunica - a moderate nationalist - and the Western-friendly Mr Djindjic have grown ever since the Serbian prime minister decided to extradite former Yugoslav President Slobodan Milosevic to the war crimes tribunal in The Hague.

Friends to foes

The two men were united when Mr Milosevic was ousted in late 2000, but analysts have frequently cautioned that the coalition was not one with a long-term future.

Early elections would not be in Djindjic's interest

DSS ministers quit the cabinet last August, and analysts say the most recent move is designed to clearly position the party ahead of presidential and parliamentary elections.

"We want to show that we are a clear democratic alternative to the existing government and authorities so we win the confidence of citizens in future elections," said Dejan Mihajlov, a Kostunica aide.

The cabinet would put forward "better solutions" for Serbia's woes, including presenting new agendas for economic and police reform. A new programme will be presented next week, he said.

Mr Kostunica is said to be keen on the idea of early elections - a prospect made more real last week when Mr Djindjic's wing sacked 50 DSS MPs for failing to attend parliamentary debates.

Mr Djindjic said early elections were possible if the expulsions did not work and parliament could not function due to the lack of a quorum.

But correspondents say early elections would certainly not be in the interests of Mr Djindjic or his party, which has been lagging in the polls.