Colombo: Sri Lanka's brewing political crisis could be an unexpected blow to the Norwegian-backed peace bid aimed at ending three decades of ethnic bloodshed, officials and diplomats believe.

A leadership struggle within a coalition partner has threatened the stability of the government of Prime Minister Ranil Wickremesinghe and raised the prospect of a second election in as many years.

The last Parliamentary elections, in December 2001, returned a cohabitation government with Parliament and the Presidency run by two rival parties of the majority Sinhalese community.

Attempts by Parliament to clip President Chandrika Kumaratunga's powers were virtually stalled by the Supreme Court, whose decision is to be unveiled in Parliament this week, political sources said.

They said the court had called for a nation-wide referendum if the Parliament were to go ahead with its bid to curtail Kumaratunga's Constitutional power to sack the Parliament after just one year after the last election.

"The government is not keen on going for a referendum on just one issue," a government minister said. "We think it is better to go before the people for a fresh mandate and increase our strength."

Government spokesman G L Peiris announced this month that the government would face political instability as long as the President enjoyed the power to sack Parliament while it pursued a delicate peace process with the Tamil Tigers.

"What is likely to happen is that the peace process will be put on hold for about two to three months until the political crisis is resolved through an election," a government source said.

Cohabitation politics were further complicated by internal rivalry within the minority Sri Lanka Muslim Congress (SLMC), which could make or break the Oslo-backed peace process.